16.1 Introduction

In the design and perception of new products it is important to specify the contributions made by to different facets or elements. The overall utility and acceptance of such a new product can then be estimated and understood as a possibly additive function of the elementary utilities. Examples are the design of cars, a food article or the program of a political party. For a new type of margarine one may ask whether a change in taste or presentation will enhance the overall perception of the product. The elementary utilities are here the presentation style and the taste (e.g., calory content). For a party program one may want to investigate whether a stronger ecological or a stronger social orientation gives a better overall profile of the party. For the marketing of a new car one may be interested in whether this new car should have a stronger active safety equipment or a more sporty note or combinations of both.

In Conjoint Measurement Analysis one assumes that the overall utility can be explained as an additive decomposition of the utilities of different elements. In a sample of questionnaires people ranked the product types and thus revealed their preference orderings. The aim is to find the decomposition of the overall utility on the basis of observed data and to interpret the elementary or marginal utilities.

EXAMPLE 16.1   A car producer plans to introduce a new car with features that appeal to the customer and that may help in promoting future sales. The new elements that are considered are safety components (airbag component just for the driver or also for the second front seat) and a sporty look (leather steering wheel vs. leather interior). The car producer has thus 4 lines of cars.

car 1: basic safety equipment and low sportiness
car 2: basic safety equipment and high sportiness
car 3: high safety equipment and low sportiness
car 4: high safety equipment and high sportiness
For the car producer it is important to rank these cars and to find out customers' attitudes toward a certain product line in order to develop a suitable marketing scheme. A tester may rank the cars as follows:

Table 16.1: Tester's ranking of cars.
car 1 2 3 4
ranking 1 2 4 3


The elementary utilities here are the safety equipment and the level of sportiness. Conjoint Measurement Analysis aims at explaining the rank order given by the test person as a function of these elementary utilities.

EXAMPLE 16.2   A food producer plans to create a new margarine and varies the product characteristics ``calories'' (low vs. high) and ``presentation'' (a plastic pot vs. paper package) (Backhaus et al.; 1996). We can view this in fact as ranking four products.

product 1: low calories and plastic pot
product 2: low calories and paper package
product 3: high calories and plastic pot
product 4: high calories and paper package

These four fictive products may now be ordered by a set of sample testers as described in Table 16.2.

Table 16.2: Tester's ranking of margarine.
Product 1 2 3 4
ranking 3 4 1 2


The Conjoint Measurement Analysis aims to explain such a preference ranking by attributing part-worths to the different elements of the product. The part-worths are the utilities of the elementary components of the product.

In interpreting the part-worths one may find that for a test person one of the elements has a higher value or utility. This may lead to a new design or to the decision that this utility should be emphasized in advertisement schemes.

Summary
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Conjoint Measurement Analysis is used in the design of new products.
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Conjoint Measurement Analysis tries to identify part-worth utilities that contribute to an overall utility.
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The part-worths enter additively into an overall utility.
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The interpretation of the part-worths gives insight into the perception and acceptance of the product.