Conjoint Analysis

Dr. R. RAVANAN
Joint Director of Collegiate Education, Chennai Region
Former Principal, Presidency College, Chennai
Former Head, Dept of Statistics, Presidency College
 Definition

Conjoint analysis is a statistical technique used in

market research to determine how people value
different features that make up an individual product
or service.
Objective of Conjoint Analysis
• The objective of conjoint analysis is to determine what
combination of a limited number of attributes is most
influential on respondent choice or decision making.

• A controlled set of potential products or services is

shown to respondents and by analyzing how they make
preferences between these products, the implicit
valuation of the individual elements making up the
product or service can be determined.

• These implicit valuations (utilities or part-worths) can be

used to create market models that estimate market share,
revenue and even profitability of new designs.
 Conjoint Design
• A product or service area is described in terms of a
number of attributes.

• For example, a television may have attributes of screen

size, screen format, brand, price and so on.

• Each attribute can then be broken down into a number

of levels.

• For instance, levels for screen format may be LED, LCD,

or Plasma.
 Recommended Usage

• Individual Consumer

• Segment level

• Across segments
Number of Attributes and levels

• To avoid creating masses of data, the researcher has to

careful in selecting both the number of attributes and
number of levels

• Number of combinations being offered for ranking by

respondents not to be high
 Example
• An industrial product – a CNC machine tool which is used
to perform a variety of manufacturing operations.

• Three attributes are consider:

• Setup time in minutes

• Delivery period in days
• Number of different tools the machine can
accommodate
 Example
• Levels of attributes are

• Setup time: 3, 6, 9, 12 minutes ( 4 levels)

• Delivery period : 18, 22, 28 days ( 3 levels)

• Number of tool: 4, 8, 10 ( 3 levels)

• Number of combination = 4 x 3 x 3 = 36
 Ranking of combinations

• The input process is to collect from a respondent his

ranking for all the 36 combinations of attribute Levels
Running conjoint as a Regression Model
• For those who do not have a conjoint analysis module
on their statistical package, it is quite easy to convert
the conjoint analysis input into an equivalent regression
model and run it as a Regression.
• The coding of the attribute levels for this purpose is
known as “Effects coding”

• Set up time V1 V2 V3
S3 1 0 0

S6 0 1 0
S9 0 0 1
S12 -1 -1 -1
Running conjoint as a Regression Model
• Delivery period V4 V5
D18 1 0

D22 0 1
D28 -1 -1

• Number of tools V6 V7
T4 1 0

T8 0 1
T10 -1 -1
• Independent variables : 7 variables
• Dependent variable : Rating of each combination
• Here rating is a reverse of ranking from 1 as 36, 2 as 35,
…. 36 as 1
 Utility table for conjoint analysis
• Attibutes Level Part utility Range of utility
• Set up time = max - min
S3 5.5 = 5.5 – (-8.6)
S6 4.2 = 14.1
S9 -1.1
S12 -8.6

• Delivery period
D18 3.3 =3.3 – (-4.6)
D22 1.3 =7.9
D28 -4.6

• Number of tools
T4 -10.3 =8.7 –(-10.3)
T8 1.6 = 19.0
T10 8.7