Companies should follow these steps in order to develop a conjoint analysis:
- Product/service attributed should be selected. For example, size, appearance, price, functionality, user friendliness.
- Each attribute should be assigned a value. These values of these attributes will represent the variance available in each of these attributes. For example, for the attribute of size, the options available could be 5”, 10” or 25”. Higher value on the scale represent, more importance attached to a particular attribute.
- Product/service should be defined as a combination of all the varying attributes, which will form the subset of all possible products that a company can manufacture or deliver.
- The combination of attributes through which a product is represented must be determined. This information can be represented through visual diagrams, prototypes or mere descriptions.
- It must be determined how the results and answers from the respondents will be aggregated. Decision makers are faced with three choices at this stage: Individuals responses could be used, the results could be aggregated to represent a single utility function or the respondents could be segmentized into sub-groups.
- Decision makers at this stage should select the technique they’ll be employing to process, organize and analyze the data, in order to draw meaningful conclusion out of the information. A popular model to represent varying attributes Part-Worth Model. Alternatively, vector models or ideal-point models could also be used.