Conjoint analysis is a popular marketing research technique that marketers use to determine what features a new product should have and how it should be priced. It requires research participants to make a series of trade-offs. Analysis of these trade-offs will reveal the relative importance of component attributes.
Conjoint Analysis is a technique used to assess the different contributions aspects of a product or service make to individuals in the purchasing decision. For example, if a consumer decides to buy a TV there are a couple of distinct variables involved:
Brand (Sony, LG, Vizio, etc.)
Price (800-1500)
Resolution (1080p or 720p)
SIze (35" to 45")
A conjoint study usually involves showing respondents product profiles and asking them to indicate (in a variety of ways) how much they like or prefer these alternative product profiles. Statistics are then used to work out the contribution that each product attribute is making to the overall likeability.
Market Segmentation Simulator is used to convert the raw conjoint part worths, which can be difficult to understand, into a much more meaningful and useful simulated market model. Products can be introduced within a simulated market scenario and the simulator reports the percentage of respondents projected to choose each product.
A market segmentation simulator allows an analyst or researcher to conduct what-if scenarios to investigate issues such as new products, design, pricing strategy, etc. The Market Segmentation Simulator is considered one of the most important tools resulting from a conjoint analysis project.
