Monday, March 16, 2015

The Role of Conjoint Analysis: Apple vs. Samsung

When launching or updating products into the market, conjoint analysis can give businesses and market researchers a competitive edge. In the most basic of terms, rather than just slapping a price tag of $10 on a red widget and releasing it onto an unsuspecting marketplace, conjoint analysis can determine that more people would buy a blue gizmo and would be willing to pay $15 for the item. Anyone can clearly see the value and benefits of using this type of predictive technology.

Preeti Nathan, Director of Customer Insights for the national chain of Safeway grocery stores, cashed in on a conjoint project by using tools from Survey Analytics. In a case study she stated, “It was just the right mix of sophistication and simplicity.”

Apple, Samsung and Conjoint

According to market research released by the New York Times, the three industries that have surpassed the trillion-dollar mark are food, automobiles and defense with sales of mobile devices set to reach this milestone in the near future. With billions of dollars on the line from the sales of these handheld devices, sparks are already beginning to fly.

Many already know that Apple and Samsung are knee-deep in a lawsuit, each suing the other for patent infringements found on their devices. Apple is seeking over $2 billion in damages, but how did they arrive at that figure? That’s right, conjoint analysis.

Apple hired John Hauser, professor of marketing at MIT, to conduct research and testify in court as an expert witness. Using conjoint analysis, Hauser was able to determine that customers would be willing to pay anywhere from $32 to $102 extra for the features in question. Samsung fought back with their own marketing expert from Wharton, Professor David Reibstein.

Reibstein questioned the research, but not on quantitative terms. His contention was that the research was flawed because it didn’t include other important attributes such as brand name, operating system and battery life. He was quoted as saying it was like doing research "on cup holders in cars while ignoring the manufacturer name."

The Power of Conjoint Analysis

The important lesson to be learned from this court case is that the research from conjoint analysis did hold up in court when it came to putting a dollar amount on the features in question. For those of you who are curious, they are sliding to unlock universal search and auto correct.

Another point to be made for conjoint analysis is that there is a big difference between answering questions and conducting a survey that shows actual, real-world behavior. The results from the conjoint analysis were successful in convincing a court of law to agree to a $2 billion figure for Apple and that, in itself, is a victory.

Looking For the Competitive Edge?

Whether you are looking to launch a new product, needing real-world consumer behaviors or have been searching for s sophisticated yet simple platform that handles all your survey needs, a conjoint analysis project may be the answer to your questions. Want to see how conjoint can help you get that competitive edge you’ve been looking for? Click below to find out how it can work for you.

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