3 minutes to read. By author Michaela Mora on January 31, 2012 Topics: Price Research, Analysis Techniques, Concept Testing, Conjoint Analysis, New Product Development, Quantitative Research
As the experience economy moves on to more customization and personalization, many products and services have adopted a “menu” approach similar to what restaurants offer.
You can now find product categories in which:
The challenge is to find the right balance of offerings to provide options for both Do-It-Your-self and Do-It-For-me customers.
The good news is that we have now tools that allow us to mimic and research a “menu” offering, faster, and cheaper than ever.
Welcome to Menu-Based Conjoint Analysis.
This technique allows us to study customer choices in a context where customization is present, and multiple choices can be made.
Although this is often the best approach, it is pretty advanced and requires expertise to use it. Therefore, clients tend to favor the traditional choice-based conjoint analysis (CBC). Once they are familiar with this one, a few venture into the adaptive conjoint analysis (ACBC).
Both approaches are useful. They are often enough to accomplish certain research objectives. However, they have some limitations.
In traditional Choice-based Conjoint (CBC) analysis, customers are presented with a set of options and are asked to select one.
Unfortunately, this may include features that may be irrelevant to the person making the choice.
Adaptive Conjoint Analysis (ACBC) is an improvement by starting with a set of exercises aimed at identifying which attributes are relevant. Subsequently, we use them to create options from which participants have to choose one.
However, in both the traditional and adaptive approaches, participants can only choose one option. In contrast, in full customization scenarios, these approaches fall short.
In the case of Menu-Based Conjoint Analysis (MBC), we can create scenarios that match the actual offerings.
Above all, you will get better insights from MBC if:
For example, you may want to understand the choices between product combos plus à la carte items, or all à la carte items. In these scenarios, we let participants choose multiple options within the parameters of the offering.
As a result, we can then estimate the probability of choosing each “combo,” or individual items presented in the menu at different prices.
We can use the MBC approach to answer business questions such as:
Among the products and services that could benefit from Menu-Based Conjoint Analysis are:
In short, the menu-based conjoint analysis will help you not only to configure new offerings but also to optimize your current products and services. Consequently, it can support your company’s revenue and profit goals.
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