7033MKT Evaluating Marketing Performance
Conjoint
Analysis Case Study – Case Description
The latest development in the home entertainment
industry is curved TVs. Though the market for curved TVs is a small portion of
the overall TV market, it is growing at a healthy rate of 20% and has the
potential to become the ‘next big thing’ in the TV industry. The product is
still in the early stages of its lifecycle and Samsung and LG are the
current dominant players in the market. Sony
is planning to introduce its brand in the coming months and get a share of this
promising market.
As a first step, Sony has conducted a conjoint
analysis to identify the product profile which is most likely to succeed in the
market. In a pre-test conducted among 100 participants, screen resolution, screen size and refresh rate were identified as the main attributes that consumers
look for when buying a curved TV. Other attributes such as brand names (only
leading brands have curved TVs) and price (curved TV consumers are less price
sensitive) were found to be less important in this market. Sony’s engineering
team can offer 3 different levels in each of these 3 important attributes as
given below:
Attribute |
Levels |
Resolution |
1080/2160/4000 Pixels |
Screen size |
55/65/105 Inches |
Refresh rate |
100/120/240 Hz |
Assume that customers need not necessarily
prefer higher levels of any of these attributes over a lower level (i.e. 2160
pixel TV is not necessarily better than 1080 pixel TV for a consumer because
better attribute comes up with some other form of limitation such as higher
weight, higher heat generation, etc.).
After identifying the attributes and their
levels, Sony has collected the preference ranking of different product profiles
using full factorial design among 20 participants (assume that they are
representative of the population of Australia). It has also collected attribute
information for 2 existing curved TVs in the market place, 1 from each of its
competitors. The product profile information is given below and the preference
data is given in the case Excel data file.
Profiles of Existing Products in the Market
Product |
Description |
Samsung curved TV |
2160 P, 105 In, 120 Hz |
LG curved TV |
4000 P, 55 In, 120 Hz |
Sony’s objective in this conjoint analysis
is to identify the product profile(s) which is/are likely to give the highest
market share and profits. Sony is considering offering a maximum of 2 products
based on one of the following strategies:
1.
The most preferred product
(i.e., the product with the highest market share)
2.
Two products based on attribute
preference segmentation
You have been hired as Sony’s marketing
consultant to help analyse the conjoint data and identify the most profitable
product strategy for Sony.
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