Marketing Management Lecture Week 4 CONJOINT APP

Marketing Management Lecture Week 4 CONJOINT APP -...

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Unformatted text preview: Professor Arjun Chakravarti Fall 2010 MARKETING MANAGEMENT Week 4: Applications of Conjoint Analysis Objectives • Offer a product consistent with target market and chosen positioning • Augmented product: Specifications, packaging, labeling, positioning etc • Evaluate product development needs • Evaluate impact on product line Factors Influencing Product Decisions Customer Analysis • Segmentation and perceptions (map) • Likelihood of adoption Company analysis • Product ‐ company fit • Capabilities/core competency (strengths/weaknesses) • Economics Competitor Analysis • Product market structure and positioning • Competitor response profiles hy Products Fail • Market too small • Product ‐ company fit poor • Not new – no real benefit • Poor positioning • Limited channel support • Forecast error • Competitive response • Changes in environment roduct Development Strategy 1. OPPORTUNITY IDENTIFICATION Market Definition, Idea Generation 2. DESIGN Perceptual Maps, Clustering, Forecasting Production, Marketing Mix 3. TESTING Advertising, testing, product testing, pretesting, Test marketing, Pricing tests 4. INTRODUCTION ‐ Launch, planning, tracking the launch 5. LIFE CYCLE MANAGEMENT Market response management Competitive Defense Innovation at maturity Product line management 2b. USAGE DESIGN / PROTOTYPING (IIT) ‐ Needs to be more explicitly integrated Into the marketing management framework 2b. USAGE DESIGN / PROTOTYPING (IIT) ‐ Needs to be more explicitly integrated Into the marketing management framework Concept Screening: Conjoint Analysis INTUITION How can we tell what the effect of Feature A is on my liking, willingness to purchase, or actual choice of a product? 1. Identify. all possible combinations (including unrealistic!) 2. Experiment. Compare those with and without Feature A to measure the effect of Feature LOGISTICS 1. Define a “menu” of features and attribute levels on each feature 2. Construct test items 3. Test all OR create random combinations OR orthogonal design KEY: Level of one feature uncorrelated with levels on other features! (Don’t “double count”) Concept Screening: Conjoint Analysis Invented in psychology – used in many fields PREMISES: 1. A product is a bundle of attributes. Each attribute has many levels 2. Assume that total utility for the product is the sum of the utility of each attributes. This allows us to understand tradeoffs in different levels of attributes. 3. Extract data on consumers’ overall preferences using choices or preferences that consumers have for each product bundle. 4. Decompose overall preferences into preferences for specific attributes. THINK OF IT AS A WAY TO EVALUATE DIFFERENTIATION VALUE OF AN EVC Concept Screening: Conjoint Analysis Seven steps for running conjoint 1. Identify and define attributes in customer language 2. Specify attribute variation and levels 3. Create experimental and survey design ‐ Mechanism: Choice, rank, rate, pairwise...
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Marketing Management Lecture Week 4 CONJOINT APP -...

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