conjoint analysis

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A versatile market research technique that can provide valuable information for market segmentation, new product development, forecasting and pricing decisions. The technique is important in competitive positioning of new products and in new product development. It seeks to determine the relative importance and strength of various combinations of product attributes in the minds of target customers. The background research on conjoint analysis focuses on combinations rather than individual attributes of products and services. Respondents are asked to evaluate various combinations of attributes, and then asked to evaluate them overall. The objective is to find the right combination for the right target market. For example, the perfect combination for the British middle-class buyer of a Volvo may be safety and durability, rather than safety and style. In a real purchase situation, buyers examine and evaluate a range of features or attributes in making their final purchase choice. Conjoint analysis examines these evaluations and exchanges to determine what features are most valued by buyers. Once data is collected the researcher can conduct a number of ‘choice simulations’ to estimate market share for products with different attributes/features. This lets the researcher know which products or services will be successful before the product is introduced to the market.

Subjects: Marketing.

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