Page 268 - DMGT209_QUANTITATIVE_TECHNIQUES_II

Unit 14: Multivariate Analysis

There are three steps in conjoint analysis: Notes
(a) Identification of relevant products or service attributes.
(b) Collection of data.
(c) Estimation of worth for the attribute chosen.
For attributes selection, the market researcher can conduct interview with the customers directly.

Example of conjoint analysis for a Laptop:
For a laptop, consider 3 attributes:
Weight (3 Kg or 5 Kg)
Battery life (2 hours or 4 hours)
Brand name (Lenovo or Dell)

Task Rank order the following combination of these characteristics:
1 = Most preferred, 8= Least preferred

Combination Rank
3 Kg, 2 hours, Lenovo 4
5 Kg, 4 hours, Dell 5
5 Kg, 2 hours, Lenovo 8
3 Kg, 4 hours, Lenovo 3
3 Kg, 2 hours, Dell 2
5 Kg, 4 hours, Lenovo 7
5 Kg, 2 hours, Dell 6
3 Kg, 4 hours, Dell 1

One combination 3 kg, 4 hours, Dell clearly dominates and 5 kg, 2 hours, Lenovo is least
preferred.
Let us now take the average rank for 3 kg option = 4+3+2+1 / 4 = 2.5
For 5 kg option average rank is 5+8+7+6 / 4 = 6.5
For 4 hour option 5+3+7+1 / 4 = 4
For 2 hour option 4+8+2+6 / 4 = 5
For Dell 5+6+1+2 / 4 = 3.5
For Lenovo 5.5
Looking at the difference in average ranks, the most important characteristic to this
respondent is weight = 4, followed by brand name = 2 and battery life = 1.

Self Assessment

Fill in the blanks:
9. ....................... analysis is concerned with the measurement of the joint effect of two or more
attributes.
10. For ....................... selection, the market researcher can conduct interview with the customers
directly.

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