J. DOUGLAS CARROLL and PAUL E.
GREEN*
Psychometric Methods in Marketing
Research: Part I, Conjoint Analysis
Marketing research, similar to the business disciplines in
general, has been a long time borrower of models, tools., and
techniques from other sciences. Economists, statisticians,
and operations researchers have made significant contribu-
tions to marketing, particularly in prescriptive model build-
ing. Over the past 30 years, psychometHcians and mathe-
matical psychologists have also provided a bounty of
research riches in measurement and data analysis
techniques.
Our editorial comments on those parts of the psyehome-
trician's tool kit that seem most applicable to marketing
researchers. Our purview is limited. For example, we do nol
discuss covariance structure analysis and latent trait models,
despite their popularity and utility, and we present a limited
coverage of the subareas that we do survey. Here, we focus
on conjoint analysis, discussing il in terms of the problems
that have motivated its more recent contributions to market-
ing research, [n subsequent editorials, we will consider mul-
tidimensional scaling and cluster analysis.
Currently, conjoint analysis and the related technique of
experimental choice analysis represent the most widely
applied methodologies for measuring and analyzing con-
sumer preferences. Note that the seminal theoretical contri-
bution to conjoint analysis was made by Luce, a mathemat-
ical psychologist, and Tukey. a statistician (Luce and Tukey
1964). Early psychometric contributions to nonmetric con-
joint analysis were also made by Kruskal (196-'i). Roskam
(1968), Carroll (1969. 1973). and Young (1972).
The evolution of conjoint analysis in marketing research
and practice has been extensively documented in reviews by
Green and Srinivasan (1978, 1990), Wittink and Cattin
(1989). and Wittink, Vriens. and Burhenne (1994). In addi-
tion. Green and Krieger (1993) have surveyed conjoint
methodology from the standpoint of new product design and
optimization.
A TAXONOMY OF CONJOINT METHODS
The last fifteen years have witnessed a remarkable variety
of new models and parameter estimation procedures for con-
joint analysis. Figure 1 (adapted from Green, Krieger, and
*J. Douglas Carroll is ihe Board of Governors Professor ol" Marketing
and Psychology, Graduate School of Management. Rutgers University, Paul
E. Green is the Sebastian S. Kresge Professor of Marketing. Whanon
School, University of Pennsylvania. The authors ihank JcrTy Wind and the
editor lor their comment.^ on the editorial.
385
Guest Editorial
Sehaffer 1993a) provides a taxonomy of various approaches
and a sampling of early contributions to the field. The far
left-hand branch of the tree lists techtiiques for analyzing
traditional, full-profile-only data. The principal parameter
estimation methods are MONANOVA (Kruskal 1965), the non-
metric version of PREFMAP'S vector model (Carroll 1973)
and LiNMAP (ShtKker and Srinivasan 1977). Increasingly,
Ordinary Least Squares (OLS) regression (Carmone, Green,
and Jain 1978; Cattin and Wittink 1976) is being used for
parameter fitting.
The analysis of full-profile conjoint data benefits from a
variety of approaches, including models that conserve
degrees of freedom by fitting either prespecified functional
forms or constrained parameters. For example, researchers
(Herman 1988; Krishnamurthi and Wittink 1989; Pekelman
and Sen 1979) augment traditional part-worth modeling
with mixtures of linear, quadratic, and part-worth parame-
ters. Gains in reliability and validity can also be obtained by
constraining part-worths to respect within-attrihute monoto-
nicity (Srinivasan, Jain, and Malhotra 1983) or various par-
tial aggregation methods, such as those proposed by Green
and DeSarbo (1979). Hagerty (1985), and Kamakura
(1988).
If tbe researcher also collects self-explicated data on indi-
vidual attribute-level desirabilities and attribute impor-
tances, further improvements are possible, as is illustrated
by the Bayesian-Iike method of Cattin, Gelfand and Danes
(1983) and the parameter constrained approach of van der
Lans and Heiser (1992). In both cases, considerably more
data collection is entailed, because each of these methods
assumes that a large enough set of full profiles is obtained to
estimate parl-worths from either profile or self-explicated
data.
In contrast, the hybrid models (Green 1984; Green,
Goldberg, and Montemayor 1981) and the Adaptive
Conjoint Analysis (ACA) model (Johnson 1987) collect a
limited number of full or partial profiles that serve as ways
to refine self-explicated part-worths (ACA) or estimate
additional group-level parameters (hybrid models).'
Because these latter approaches have fewer data demands
than the Bayesian methods, they have received extensive
commercial application.
'Noie thai in Part II of our editorial we will also UKC the lenn "hybrid" to
refer to mixtures of continuous (spatial) and discrete (e.g.. tree structure)
components in multidimensional scaling. Hopefully, the context will make
the distinction clear.
Journal of Markeling Research
Vol. XXXII (November 1995), 385-391
386 JOURNAL OF MARKETING RESEARCH, NOVEMBER 1995

Figure 1
EARLY DEVELOPMENTS IN PART-WORTH ESTIMATION METHODS

Early Developments in
Part-Worth Estimation Methods

Self-Explicated
Self-Explicated
Data Only
and Profiles

Partial Profiles
Traditional (Subset)
Conjoint
(Individual Continuous Constrained Partially
Analysis) Variables Attribute Aggregated Complete Set Subset o(
Levels Models of Pull Profiles Full Profiles

1
Pekelman Order
1 Bayesian Hybrid Adaptive CASEMAP
MONANOVA Componential
& Sen Constraints Canin, Models Conjoint Srinivasan
Kruskai Segmentaion
Green. Analysis (1988)
(196S) (1979) Srinivasan, Green & Gelfand, &
Jain, & DeSarbo Danes Goldbetg, & Johnson
PREFMAP Bretton- (1979} (1983) Montemayor (1987) Srinivasan
Malholra
Carroll Clark (1981) & Wyner
(1983) Optimal
(1973) Herman Monolonic (1989)
Scaling
(1988) Constraints Gfeen
LlNMAP Hagerty
Shocker S (198S) van der Lans (1984)
Srinivasan Knshnamunhi & Heiser
Cluster
(1977) & Wiltink (1990)
Analysis
(1989)
OLS Kamakura
Regression (1986)

In the far right-hand branch, we note that in CASEMAP
(Srinivasan 1988; Srinivasan and Wyner 1989). there are no
profile data. The entire exercise consists of self-explicated
data collection and modeling.
TRENDS IN CONJOINT ANALYSIS APPLICATIONS
Two trends have been noted in the application of conjoint
analysis lo business problems. First, the early successes of
conjoint analysis have led to industry demands for tech-
niques that handle ever larger numbers of attributes and
attribute levels. This need, in tum, bas prompted tbe devel-
opment ot data collection methods and models tbat marked-
ly extend traditional OLS regression, tbe procedure typical-
ly used in individualized full-proftle conjoint analysis.
Second, tbere is a growing interest in data collection
methods and models tbat consider explicit competitive con-
texts. In other words, rather than bave a respondent sort,
rank, and tben rate a set of full-profile descriptions on a like-
lihood-of-purcbase scale, respondents are shown sets of two
or more explicitly defined competitive profiles tbat :ire often
identified by brand or supplier name. Tbe respondent is
asked to pick his or ber most preferred offering in eacb
cboice set or, possibly, allocate 100 points across tbe alter-
natives to indicate tbe alternatives' likelibood of being cho-
sen. Quantal choice models (e.g., multinomial logit and pro-
bit models) are applied to data collected by tbis means.
Batsell and Louviere (1991) refer to this development as
experimental choice analysis (see. also, Carson et al. 1994;
Louviere 1988). We comment on eacb trend, in tum.
Coping with Large Conjoint Analysis Problems
In the 1980s, a plethora of models were introduced, in
which self-explicated responses to attribute-level desirabili-
ties and attribute importances were obtained, in addition to
the traditional evaluations of full profiles. Tbe motivation
for collecting tbe two sets of data was to increase part-wortb
reliability (particularly for large-scale problems) witbout
unduly increasing the data collection burden. Sawtooth's
ACA and Green and colleagues' hybrid models (Green
1984) collect only a limited set of either partial or full pro-
files. Cross validation results for hybrid, compared to full-
profile conjoint analysis, are mixed. Green and Srinivasan
(1990) report tbat hybrid models tend to outperform self-
explicated models, but show lower internal cross-validation
tban full profile approaches for problems entailing approxi-
mately six attributes or fewer. ACA and bybrid models were
Guest Editorial
originally proposed to deal witb larger-scale problems; and
additional research is needed on tbeir cross-validation per-
formance in the class of problems for which tbey were ini-
tially designed (for the kind of research that is still needed.
see Moore and Semenik 1988).
A related researcb patb deals with data procedures that
collect only full-profile data, but introduce researcher-sup-
plied parameter constraints. As we noted previously,
Srinivasan, Jain, and Malhotra (1983) pioneered tbis
approach in wbicb the LINMAP program is used to estimate
part-worths, subject to researcber-supplied constraints on
the ordering of part-worths within the attribute. (The same
authors suggest that LINMAP could be used to impose con-
straints at the individual respondent level.)
Recently, Allenby. Arora, and Ginter (1995) and Lenk and
colleagues (1994) explored tbe potential of hierarcbical
Bayesian metbods in conjoint analysis. The first set of
authors extends Srinivasan, Jain, and Malhotra's (1983)
research by utilizing Bayesian methods and the Gibbs sam-
pler to incorporate prior ordinal constraints on conjoint part-
worths. The second set sbows bow hierarcbical Bayesian
models can be used to reduce furtber tbe usual orthogonal
main efTects plans and still estimate reliable individual part-
worth functions (see, also. Allenby and Ginter 1994). All
tbree articles report good internal cross validation on the
data sets and models used for comparison.
Another research path, which also collects only full-pro-
file data, employs models tbat utilize various means of data
aggregation to obtain more stable part-wortb estimates.
Hagerty (1985) is the first researcber to consider tbis
approach. He proposes a factor analytic method, which he
calls optimal scaling, to provide a lower rank approximation
of the original respondents-by-profiles preference response
matrix. Eacb row of this matrix can then be analyzed with an
OLS regression to obtain individualized part-worths. In bis
empirical data set, individual-level predictions made by tbe
"smootbed" model outperformed those based on tbe original
data, wben tbey are applied to a boldout sample.
Hagerty's (1985) study was soon followed by
Kamakura's (1988) cluster-based procedure. Tbis, in turn,
was followed by a host of related cluster-wise regression
methods (DeSarbo, Oliver, and Rangaswamy 1989;
Steenkamp and Wedel 1992; Wedel and DeSarbo 1993;
Wedel and Kistemaker 1989; Wedel and Steenkamp 1989).
DeSarbo and colleagues (1992) introduce a full-fledged
latent class conjoint model and compared tbis model to tbe
more traditional approach of cluster analyzing individual
part-wortbs. Kamakura. Wedel. and Agrawal (1994) tben
extend DeSarbo and colleagues' (1992) model and Ogawa's
(1987) approacb to incorporate consumer background vari-
ables (see, also. Dillon 1994).
Hagerty's (1985) model leads to part-wortbs that repre-
sent an amalgam of the person's and group's data. An empir-
ical Bayes approach by Green, Krieger. and Schaffer
(1993a) also blends individual- witb group-level responses.
In contrast. DeSarbo and colleagues' (1992) cluster-wise
methods provide a set of latent groups, with a single set of
part-wortbs for each group (i.e.. segment). In practice, each
person is assigned to tbe group with tbe bigbest posterior
probability.
387
Relatively few studies empirically compare the newer
models to other new models or such industry standards as
Bretton-Clark's full profile conjoint (Herman 1988) and
Sawtooth's ACA procedure (Johnson 1987). Green and
Helsen (1989) found no validation improvement in
Hagerty's (1985) mode! or Kamakura's (1988) clustering
model over full-profile conjoint analysis. A second study,
involving four additional data sets, also showed no improve-
ment in Hagerty's (1985) optimal scaling over full-profile
conjoint analysis (Green, Krieger and Scbaffer 1993b).
Explicit Competitive Sets
Experimental cboice analysis often combines discrete
choice responses, a logit model, and fractional factorial
designs that frequently surpass the usual ortbogonal main
effects plans used typically in ftill-profile conjoint analysis.-
Early approaches to explicit competitive set evaluations
include Mabajan, Green, and Goldberg's (1982) study,
which used Tbeil's logit approacb, DeSarbu and colleagues'
(1982) study, which used Carroll, Pruzansky. and Kruskal's
(1979) CANDELINC constrained multidimensional scaling
model, and Louviere and Woodward's (1983) study, which
employed a multinomial logit model. Experimental cboice
analysis spurred software developers, such as Sawtooth
Software and Intelligent Marketing Systems, Inc., to devel-
op and distribute software for implementing discrete choice
models with the result that many new classes of experimen-
tal designs were proposed (Anderson and Wiley 1992;
Krieger and Green 1991; Kuhfield, Tobias, and Garratt
1994; Lazari and Anderson 1994; Steekel, DeSarbo, and
Mabajan 1991).
Experimental choice models require relatively large
amounts of data; parameters frequently are estimated at tbe
total-sample (or possibly segment) level. The respondent's
task is more complex, because he or she must keep track of
each brand's profile in what may be a set of four or more
brands with idiosyncratic attributes and levels. Altbough the
data administration task is clearly more realistic, it can be
daunting, compared to tbe relative simplicity of ACA or full-
profile evaluation.
Tcx) little is currently known about the extent to which
conjoint analysis and experimental cboice analysis lead to
similar results. Empirical comparisons by Eirod, Louviere,
and Davey (1992) and Olipbant and colleagues (1992) sug-
gest reasonably close correspondence in total market share
estimates, particularly if tbe attributes are monotonic.
Experimental cboice modeling avoids the use of choice sim-
ulators and enables the researcher to estimate limited sets of
interaction terms—but whether tbe interactions are reliable
is another matter. Can respondents dea! with the more com-
plex tasks associated with experimental choice analysis?
Are segments obtained from cboice analysis similar to those
found from a post hoc clustering of part-worths? How
restrictive is tbe Independence of Irrelevant Alternatives
(IIA) assumption of the multinomial logit?
seminal thcorelical contributions lo experimenial choice analysis
have been made by an econometrician, Daniel McFadiicn (1974). a mathe-
matical psychologist, Duncan Luce (1959), and » psychometrician. L. L.
Thurstone(1927).
 JOURNAL OF MARKETING RESEARCH, NOVEMBER 1995
One approacb, discussed by De Soete and Carroll (1983),
uses the wandering vector model, witb constraints on
dimensions imposed by user-supplied factorial structures of
the stimuli (e.g., brands). Tbis method relaxes tbe HA
assumption. Altbough the approach was applied to paired
comparison data, the procedure can be extended to more
general cboice situations. However, many potential alterna-
tives to tbe basic multinomial logit still remain to be
explored.
SORTING THINGS OUT
A new researcber entering the conjoint analysis field
would probably evince suiprise tbat so many models and
procedures exist side by side, eacb purporting to offer
advantages over traditional, full-profile conjoint analysis.
Tbe commercially available personal computer (PC) pack-
ages of Bretton-Ciark (Herman 1988), SPSS (1990)
Categories, and Intelligent Marketing System's (1993a)
CoNSURV are all full-profile programs. In addition, Sawtootb
Software offers a commercial (and computer administered)
hybrid-like program (ACA). What, then, is happening to all
of tbe other model developments?
Perhaps it is only a matter of time before hierarchical
Bayes and latent class conjoint analyses become commer-
cially available to industry practitioners. However, if past
history is any guide, there seems to be less hope for rapid
diffusion. For example, bybrid conjoint procedures have
been used since tbe late 1970s and Green and Krieger (1994)
recently extended tbeir class of models to cases in whicb all
parameters are estimated at the individual level. Still, there
is no indication tbat a commercial version will be
forthcoming.
Sawtooth Software and Intelligent Marketing Systems,
Inc. have each responded to market demands for logit-based,
experimental choice prt>cedures. Are still more computer
packages needed? What are researchers' experiences with
the current multinomial logit packages for conjoint
analysis?
Wbat appears to be lacking is convincing evidence of
whether (I) tbe newer conjoint metbods for coping witb
larger numbers of attributes and levels are markedly superi-
or to tbe older approacbes and (2) individualized conjoint,
experimental cboice, and lateni class conjoint models lead to
different market share estimates and, if so, which is better
under wbich conditions. Practical answers to these interre-
lated questions entail multicriterion validation and perfor-
mance measures. Also, from a practical standpoint, there is
need for a programmer or entrepreneur willing to undertake
the time and expense necessary to develop, sell, and main-
tain user friendly computer packages in the industry
marketplace.
One of the more interesting questions is what is the pull
between conjoint analysis (with its emphasis on individual-
ized part-wortbs) and experimental choice, with its appeal to
greater realism, albeit witb aggregated or partially aggregat-
ed data. Unfortunately. little empirical evidence is available
on tbe relative merits of tbe approaches. Huber and col-
leagues (1992) suggest a possible marriage of the two.
DeSarbo and Green (1984) propose a method that combines
conjoint data with choice data (see, also. Green and Krieger
1995).
Conjoint analysts often argue for tbe value of individual-
ized part-wortbs. First, tbey point out tbal a priori segmen-
tation in wbich, for example, the part-worths are used as pre-
dictors, can provide useful information on the part-worth
profiles of selected brands or other such prior grouping vari-
ables. Second, they suggest tbat functions of the attributes,
such as derived attribute itnportances or most preferred lev-
els, can be useful segmenting variables.
Experimental choice proponents note the naturalness of
choice, as opposed to purchase likelibood ratings.
(Curiously, bowever, new product concept testing metbods,
sucb as Burke's BASES model, routinely use 5-point likeli-
hood-of-pure base scales as their primary response variable.)
They also note the better-grounded tbeoretical basis under-
lying the iogit model.
Unfortunately, the pace with whicb conjoint and cboice
models bave proliferated appears to outstrip practitioners'
abilities (and possibly interest) in testing tbem all. In such
cases, the traditional user often ignores the entreaties of new
model builders, hoping tbat someone else may assume the
evaluation task.
PROBLEMS AND PROSPECTS
Researchers have been so prolific that many more models
and tecbniques bave been proposed tban have been imple-
mented by industry practitioners. Tbe techniques that have
received industry attention tend to show the subsequent
characteristics:
1. They are amongrtieearliest models proposed and enjoy a first
mover advantage.
2. The models are easy to learn and apply. Relatively inexpen-
sive PC software is available to implement them.
3. Marketing research consulting (inns, following their appro-
priate selt-lnteresL^, have publicized the methods, including
"success stories" about the models' practical value.
4. The ideas underlying the models are relatively easy to under-
stand and are credible to the nonspecialtst consumer (e.g..
manager).
Examples of successful implementations are not hard to
find and include the Bretton-CIark (Herman 1988).
Sawtooth Software (1994). and Intelligent Marketing
System's (1993a. b) packages.
It is no exaggeration to say tbat a necessary condition for
a new psychometric model to receive widespread applica-
tion is for convenient, easy-to-use software (preferably PC-
based) to be developed, distributed, and maintained.
Educational seminars in tbe software's use are belpful, if not
essential, as well Software developers, in effect, define tbe
practice envelope. It is to tbeir advantage to remain current
witb new developments and upgrade tbeir offerings as the
state of tbe art advances. Still, tbere are bound to be lags in
adoption, as the marketplace evaluates tbe superiority
claims made by the new models' proponents and decides
wbetber the presumed benefits outweigb tbe costs of
adoption.
Guest Editorial
Narrowing the Gap Between Theory and Practice
New developments in conjoint analysis are arriving so
fast that even specialists find it difficult to keep up.
Hierarcbica! Bayes models, latent class conjoint mtxieling,
and individualized bybrid models are only a few of tbe new
approacbes and techniques that are arriving on tbe research
scene. Fortunately, the discipline bas developed a few dis-
semination channels, including AMA's Advanced Research
Techniques Forum and the Marketing Science Institute con-
ferences. The Advanced Researcb Techniques Forum pro-
vides a useful exchange between academics and profession-
al industry practitioners. Many of the new model developers
have utilized this channel to obtain user reactions, sugges-
tions, and criticisms. The Marketing Science Institute pro-
vides a number of outlets—researcb support, seminars, and
worksbops—for disseminating new researcb methods, ln
addition, tbe AMA's practitioner magazine. Marketing
Research piays a role in idea dissemination.
Despite these vehicles, tbe gap has not narrowed appre-
ciably. Part of the problem is the lack of critical comparisons
among completing techniques. Consider, for example, the
wide variety of new conjoint and experimental choice analy-
sis tecbniques that now exist:
1. How do they compare with one another?
2. How do they compare with the industry standards: Bretton-
CIark (Herman 1988) and Sawtooth Software (1994)?
3. Can level playing fields be set up to make sound reliability
and predictive validity comparisons?
4. Which techniques are good for which problem situations?
5. What are the costs of type I and type H errors associated with
industry adoption of new conjoint and choice models?
Perhaps the Marketing Science Institute or an AMA task
force could be induced to initiate procedures by which
researchers other tban the model's own developers can com-
pare the competing models. Perbaps the journals and maga-
zines could emphasize the value of researcb contributions
that implement tbis often less-than-glamorous branch of
empirical research.
Model and method comparisons can also be made at a
syntbetic data level A relevant example is Vriens. Wedel
and Wilms's (1994) recent article: Tbe autbors compare,
using Monte Carlo simulation, nine different models related
to metric conjoint segmentation. Software package reviews
are also useful to tbe applications researcber. Carmone and
Schaffer's (1995) recent review of the Bretton-Clark,
Intelligent Marketing Systems, and Sawtooth Software con-
joint analysis software is an excellent example of how botb
academics and industry researchers can become apprised of
new developments on the software scene.
Conclusions
In summary, psychometric methods in marketing have
played, and continue to play, an important role in the
advancement of marketing research theory, technique, and
application. It is noteworthy that conjoint analysis and dis-
crete choice modeling are mainstream methods in both
academia and industry. Marketing has also generated its
own specialists in these methods.
Approximately 30 years ago. the methods we describe
here would have been, at best, gleams in tbe eyes of a mere
389
handful of marketing researcbers. It is gratifying to see wbat
can happen in one and one half generations of concerted
research. Although we continue to expect gaps between the-
ory and practice, we do not gainsay the intellectual and
potential practical value of "keeping tbose models and meth-
ods coming." And, at the same time, we must continue to
take a critical view of tbeir "value added" over existing
approacbes in practical, business settings.
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