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Conjoint Analysis Lecture 21 Oct IIMK

- The document describes estimating part worth values for attributes of industrial cleaners using conjoint analysis. - It shows the calculation of part worths for factors like form, ingredients, and brand based on ranks given to stimuli. The part worth quantifies the impact of each attribute level on preference. - Factors like liquid/powder form and whether the cleaner contains phosphates or not have the greatest influence on preferences according to the calculated part worth values.

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Deepak Verma
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139 views44 pages

Conjoint Analysis Lecture 21 Oct IIMK

- The document describes estimating part worth values for attributes of industrial cleaners using conjoint analysis. - It shows the calculation of part worths for factors like form, ingredients, and brand based on ranks given to stimuli. The part worth quantifies the impact of each attribute level on preference. - Factors like liquid/powder form and whether the cleaner contains phosphates or not have the greatest influence on preferences according to the calculated part worth values.

Uploaded by

Deepak Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Estimating Part Worth for Industrial Cleaner

Find average rank for all 8 stumuli=


[1+2+3+4+5+6+7+8]/8 = 4.5
Find deviation of rank for each stimuli e.g.
Phosphate free = (1+2+3+4)/4=2.5
Deviation = 2.5-4.5 =-2
Phosphate based = (5+6+7+8)/4=6.5
Deviation = 6.5-4.5 = 2

Factor level Rank across stimuli Average Rank of
level
Deviation from
overall rank
Form
Liquid 1,2,5,6 3.5 -1
Powder 3,4,7,8 5.5 1
Ingredients
Phosphate free 1,2,3,4 2.5 -2
Phosphate based 5,6,7,8 6.5 2
Brand
HBAT 1,3,5,7 4 -0.5
Generic 2,4,6,8 5 0.5
Estimating Part Worth for Industrial Cleaner
Steps for calculation
S1: Sum of deviations from
4.5 are squared
=1+1+4+4+.25+.25=10.5
S2: Standardizing
value=6/10.5=0.571
S3: Multiply Squared
deviation by standardizing
value =0.571
Part worth = Take square
root of squared
standardized deviation
Factor
level
Rank
across
stimuli
Average
Rank of
level
(Av
Rank=4.5
)
Deviation
from
overall
rank
Liquid 1,2,5,6 3.5 -1
Powder 3,4,7,8 5.5 1
Phosphat
e free
1,2,3,4 2.5 -2
Phosphat
e based
5,6,7,8 6.5 2
HBAT 1,3,5,7 4 -0.5
Generic 2,4,6,8 5 0.5
Estimating Part Worth for Industrial Cleaner
For phosphate free calc= Sq dev=4, Stand Sq
Dev= 4*.571=2.284, PW= (2.284)
1/2
= 1.151

Factor level Reversed
deviation
Squared
deviation
Standardize
d deviation
Part worth Factor
Importance
F-Liquid +1 1 .571 +.756 28.6 %
F- Powder -1 1 -.571 -.756
I-Phosphate
free
+2 4 2.284 +1.511 57.1 %
I-Phosphate
based
-2 4 -2.284 -1.511
B-HBAT +0.5 .25 .143 +.378 14.3 %
B-Generic -0.5 .25 -.143 -.378
Estimating Part Worth for Industrial Cleaner
Factor Importance is given by the difference in part worths of the levels of the factor. In this
case FORM= .756-(-.756)=1.512; % Importance= 1.512/(1.512+3.022+.756) = 28.6 %
Conjoint Analysis- Predictive Accuracy
The estimated part worth for each attribute level can
be summed up and then rank ordered.
This should yield the rank preference of the
respondent.
The degree to which the predicted rank order
preference corresponds to the original respondent
rank order is known as the predictive accuracy of
the part worth calculation
Part worth values are not compared across
respondents as they pertain only to the respndents
preference structure
Calculate the expected market share for a product -specified
level of attribute values and a closed set of competitors
Types of Conjoint Analysis

1. Traditional additive


2. Adaptive or Self-explicated
conjoint


3. Choice Based
Product Design and Market Share
Optimization Salem Foods
Antonios brand, which has a thick crust, mozzarella cheese, chunky sauce, and medium
flavored sausage.
The Kings brand pizza has a thin crust, a cheese blend, smooth sauce, and mild-flavored
sausage.
For C1: Utility or PW of Antonios =2+6+17+27=52; Kings = 11+7+3+26=47

Salem Problem: Choice of Pizza attributes
This can be modeled as an Integer programming
problem:
Problem def: Salem has to design a Pizza with highest
utility for sufficient people so as to justify the design
and launch of the new product.
Variables :
l
ij =
1 if Salem chooses level i for attribute j, = 0 otherwise
y
k
=1 if customer chooses Salem Pizza, =0 otherwise
Because number of customers choosing Salem Pizza has to be
maximized,
Obj Fn= Max y
1+
y
2+
y
3+
y
4+
y
5 +
y
6 +
y
7+
y
8

Thus the problem requires that if C 1 has to switch PW or utility > 52 the
current PW for Antonios brand.
Since y
1
=1 only when customer buys from Salem, so we write this
above expression for consumer 1 as

Problem formulation for Salem Foods
Thus for all 8 consumers, of which 1,4,6,7,8 prefer Antonios and2,3,5
prefer kings
Additional constraints to ensure that only one
attribute gets chosen
This problem can now be solved using Management Scientist or Lindo/Lingo.
Soln: yields the result that Salem must choose Thin crust, Cheese blend, Chunky
Sauce and Mild sausage flavor. Consumer types C1, C2, C6 and C7 will choose this
pizza type.

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