Tuesday, April 15, 2014

Beginner's Guide to Conjoint Analysis (with an Infographic!)

Introduction to Conjoint Analysis
Conjoint analysis may be one of the most underrated and useful tools in market research, but people seem to shy away from it because of its seemingly complex design and methodology. The truth is that it's really not that difficult to understand, and once you can grasp it, conjoint can reveal valuable information for your business.

Here we are going to provide a high-level overview of conjoint analysis. We will go over what it is, the different types of conjoint, which one is right for you, and even provide a fun analogy with donuts. Make sure you check out the infographic for a nice summary of the information!

Conjoint analysis, AKA Trade-off analysis, is a popular statistical research method for understanding how people make complex choices. Everyday people make choices that require trade-offs - so often that we may not even realize it. Simple decisions such as, "What type of laundry detergent should I buy?" or "Which flight should I book for my upcoming trip?" all contain many different elements that ultimately formulate a decision in your mind. Whether it is subconscious or not, some of us may be more price-sensitive than others while other may be more feature-focused. This is the core of conjoint - understanding which elements are the most important to consumers and which ones could be sacrificed.

There are two main types of conjoint: choice-based conjoint and adaptive conjoint analysis. Choice based conjoint is probably the most popular, because it asks consumers to imitate which products they would choose, given certain criteria on price and features. CBC is a great option if price is the most important factor to you or your customers. Adaptive conjoint analysis is used more often in scenarios where the number of attributes/ features exceeds what can be done in a choice based scenario. ACA is great for product design and segmentation research, but not for price.

Now for the fun part: let's use an example from our very own VP of Client Services, Esther LaVielle. Esther put together a great analogy of conjoint about donuts that is easy to digest (pun intended). Think of conjoint as a display case of donuts. There are many different flavors, toppings, fillings, and ingredients (organic, vegan, gluten-free) to choose from. Before introducing a new donut, use conjoint to figure out which attributes your customers favor the most. Take a look at the images below to see an example of how this would look in an actual survey.

Introduction to Conjoint Analysis Example

Conjoint Analysis Donut question sample


The questions are used to ask respondents which donuts they would buy, given the various ingredients and pricing. As you can see, this provides very valuable results that a simpler questionnaire would not demonstrate. Apply this donut example to any other business application and you can see how it would benefit you in the long run.

If you are interested in learning more about conjoint, check out our full-length slideshare presentation here. And take a look at the infographic below for a summary on the information above!

Please include attribution to blog.surveyanalytics.com with this graphic.

Conjoint

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