Understanding how people make complex decisions has been
a "hot" topic for social scientists, psychologists
and marketers. Marketing is the late-comer, borrowing
mathematical models developed in the field of psychology
to measure preferences and predict buyer behavior. One
such model, "conjoint" (trade-off) analysis,
made its debut in marketing in the early 1970s and has
become one of the most widely used advanced marketing
research techniques today.
The fundamental idea behind conjoint analysis is that people view products and services as consisting of different features or attributes, each having some underlying value. For example, a credit card offering comes with a certain interest rate and a credit limit. For each attribute, there is a different level or degree, such as 9 percent, 15 percent or 18 percent interest rate. The assumption is that each of us carries in our heads a "point system" reflecting the degree of pleasure or displeasure (preference) we receive from each attribute level. When we evaluate a credit card, we subconsciously tally up the pros and cons of each card using this internal point system, and the card that has the highest total points is the one we would be most likely to prefer.
The trick for marketing researchers is to figure out the internal point systems that buyers are using. One approach is to simply ask them to tell us. We could list the attribute levels and ask people to score each one. But people sometimes provide scores with little discrimination, suggesting that everything is equally desirable and providing limited insight. Another problem is that the job of rating attributes is too abstract for some people to give accurate answers. As a result, attribute ratings alone are often insufficient. |
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