Conjoint analysis is an advanced market research technique that gets under the skin of how people make decisions and what they really value in products and services (it also known as Discrete Choice Estimation, or stated preference research). Conjoint analysis involves presenting people with choices and then analysing what were the drivers for those choices. The output from a conjoint analysis is a measurement of utility or value and is perfect for answering questions such as “Which should we do, build in more features, or bring our prices down?” or “Which of these changes will hurt our competitors most?” In addition, these utilities are used to build market models that enable forecasts to be made of what the market would choose given different product or service designs.
Benefits of using a conjoint analysis:
- It’s an efficient way to assess customers’ relative preference for product features.
- It can be used for customer segmentation.
- It can be used in product development.