16. Conjoint Measurement Analysis

Conjoint Measurement Analysis plays an important role in marketing. In the design of new products it is valuable to know which components carry what kind of utility for the customer. Marketing and advertisement strategies are based on the perception of the new product's overall utility. It can be valuable information for a car producer to know whether a change in sportiness or a change in safety equipment is perceived as a higher increase in overall utility. The Conjoint Measurement Analysis is a method for attributing utilities to the components (part worths) on the basis of ranks given to different outcomes (stimuli) of the product. An important assumption is that the overall utility is decomposed as a sum of the utilities of the components.

In Section 16.1 we introduce the idea of Conjoint Measurement Analysis. We give two examples from the food and car industries. In Section 16.2 we shed light on the problem of designing questionnaires for ranking different product outcomes. In Section 16.3 we see that the metric solution of estimating the part-worths is given by solving a least squares problem. The estimated preference ordering may be nonmonotone. The nonmetric solution strategy takes care of this inconsistency by iterating between a least squares solution and the pool adjacent violators algorithm.