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Introduction
At the organizational level, many problems are solved through statistical analysis. To come up with some effective results, an analysis is done. One of the most frequently used statistical analysis techniques is conjoint analysis. Based on its importance, this article aims to discuss conjoint analysis and its attributes.
What is Conjoint Analysis?
Conjoint analysis is a quantitative research method. The purpose of conducting this analysis is to collect responses from potential customers. The collected responses help in modifying the designed products and their attributes. Also, it helps in getting the right demand from the targeted audience. At the organizational level, assumption about anything is not a good approach. Assumptions can lead you towards a huge loss. So, different analysis techniques are used to get the exact answer. In this way, it becomes easy to make a final decision. Before and while using this analysis it is necessary to keep the technicality of this method in your mind. Conjoint analysis is not easy at all. It may be difficult for you to manage the task on large scale. Based on the scale, you need to go for proper arrangements. The high weightage response is finalized as a decision. If the customers are showing more negative responses, you go for an amendment in your policy. On the other hand, positive responses mean that you are already going in the right direction.
What are the uses of conjoint analysis, explain with an example?
Suppose, you are working in a mobile manufacturing organization. At the moment you are planning to launch a new series of mobile phones, there can be many things that need high attention. First of all, you have to see people are in search of new series. You can collect data on large scale and do not forget to target the potential audience. Secondly, you may have to see which feature can help you in securing distinction in the market. The last and most important aspect is linked with cost. You have to come up with the most compatible price that has to be affordable for your targeted audience. You can address all such issues with conjoint analysis.
If you do not work on such attributes, you may have to deal with low sales. It will surely lead you towards loss rather than profit. Similarly, if you do conjoint analysis there would be obvious chances for a high sales rate. A high sales rate always helps you in generating more revenue. Also, user satisfaction can be increased in this way.
Another best example of this analysis is a car manufacturing company. In this case, the company always wants to introduce something new in the vehicle. With every amendment, the company asks for a different price that is more than the previous one. The most important concern is to check if the customer is comfortable with the new price? So, you are supposed to get benefits out of this analysis. The data is collected through different means. After that, it is analyzed in a particular way. When a company asks for a justified price, it shows the real-time practice of the company. The finalized price must satisfy the company as well as the customer.
What are the different types of Conjoint Analysis?
There are two main types of conjoint analysis. The names of these types are listed below:
- Choice-based conjoint (CBC)
- Adaptive Conjoint Analysis (ACA)
Let’s discuss each type briefly.
Choice-Based Conjoint (CBC)
This type of conjoint analysis is used to see what customers feel about the combination of different features? In the case of a phone, you may have different combinations. For example, one combination is high storage and a high megapixel camera. The second combination of the feature includes a high-speed processor and more battery life. Choice-based conjoint helps you see, which combination is in demand.
Adaptive Conjoint Analysis (ACA)
Another main type of conjoint analysis is named adaptive conjoint analysis. You can also refer to it as ACA. ACA is considered as most effective type. In this type of conjoint analysis, you design another survey form based on the previous responses of people. Each response is evaluated critically. The insights of each response are organized and the most valuable and frequent response is considered the final one.
Each type of conjoint analysis has a different role to play. Based on your objective, you have to see which type is best suitable to address your problem. Another important thing about these types is that you can use one or more than one type in your analysis. In short, you have to see if your objective has been achieved or not.
What are some Advantages of Conjoint Analysis?
Following are some advantages of conjoint analysis:
- It saves a company from assumptions.
- It provides real-time analysis.
- You can identify the demand in the market.
- It helps in product testing.
- The results assist in the optimization of the portfolio.
- You can understand the psychology of the potential customer.
- This analysis helps in the high sales rate of a new product.
- It assists in decision-making.
- It saves a company from unfruitful investments.
- It helps you come up with a feature that can satisfy the audience on large scale.
- With the help of this analysis, you can analyze responses on a small as well as on large scale.
- Before launching the new product you can get its real-time demand.
Final Thoughts
Conjoint analysis is the most beneficial approach. It works very well to lower the risk factor in any company. Ultimately, the chances of having more profit increase. If you think that only the customer matters in the final decision, then you are wrong. When you just focus on customer satisfaction, you will surely face loss. So, you have to focus on the company as well as on the customer.
Author Bio
Robert Paul is a professional Content writer & Content Marketer. Based in London, Robert is an author and blogger with experience in encounter composing on various topics including but not limited to Essay Writing, Dissertation Writing, Thesis Writing Services, Assignment Writing, etc.
