Estimating Part Worth for Industrial Cleaner

Find average rank for all 8 stumuli=

[1+2+3+4+5+6+7+8]/8 = 4.5
Find deviation of rank for each
stimuli e.g.
Phosphate free = (1+2+3+4)/4=2.5
Deviation = 2.5-4.5 =-2

Phosphate based =
(5+6+7+8)/4=6.5
Deviation = 6.5-4.5 = 2

Estimating Part Worth for Industrial Cleaner

Factor level

Rank across
stimuli

Average Rank
of level

Deviation
from overall
rank

Liquid

1,2,5,6

3.5

-1

Powder

3,4,7,8

5.5

Phosphate free

1,2,3,4

2.5

-2

Phosphate
based

5,6,7,8

6.5

HBAT

1,3,5,7

-0.5

Generic

2,4,6,8

0.5

Form

Ingredients

Brand

Estimating Part Worth for Industrial Cleaner

Factor
level

Rank
across
stimuli

Averag
e Rank
of
level
(Av
Rank=
4.5)

Deviati
on
from
overall
rank

Liquid

1,2,5,6

3.5

-1

Powder

3,4,7,8

5.5

Phosph
ate free

1,2,3,4

2.5

-2

Phosph
ate
based

5,6,7,8

6.5

HBAT

1,3,5,7

-0.5

Generic 2,4,6,8 5
0.5
For phosphate free calc= Sq dev=4,
Stand Sq Dev= 4*.571=2.284, PW=
(2.284)1/2 = 1.151

Steps for calculation

S1: Sum of deviations from
4.5 are squared
=1+1+4+4+.25+.25=10.5
S2: Standardizing
value=6/10.5=0.571
S3: Multiply Squared
deviation by standardizing
value =0.571
Part worth = Take square
root of squared
standardized deviation

Estimating Part Worth for Industrial Cleaner

Factor
level

Reverse
d
deviatio
n

Squared
deviatio
n

Standard Part
ized
worth
deviatio
n

Factor
Importan
ce

F-Liquid

+1

.571

+.756

28.6 %

F- Powder

-1

-.571

-.756

IPhosphat
e free

+2

2.284

+1.511

IPhosphat
e based

-2

-2.284

-1.511

B-HBAT

+0.5

.25

.143

+.378

B-Generic

-0.5

.25

-.143

-.378

57.1 %

14.3 %

Factor Importance is given by the difference in part worths of the levels of

the factor. In this case FORM= .756-(-.756)=1.512; % Importance= 1.512/
(1.512+3.022+.756) = 28.6 %

Conjoint Analysis- Predictive Accuracy

The estimated part worth for each attribute level can be
summed up and then rank ordered.
This should yield the rank preference of the
respondent.
The degree to which the predicted rank order
preference corresponds to the original respondent rank
order is known as the predictive accuracy of the part
worth calculation
Part worth values are not compared across respondents
as they pertain only to the respndents preference
structure

 Calculate the expected market share for a product -specified

level of attribute values and a closed set of competitors

Types of Conjoint Analysis

1. Traditional additive
2. Adaptive or Selfexplicated conjoint
3. Choice Based

Product Design and Market Share Optimization Salem

Foods

Antonios brand, which has a thick crust, mozzarella cheese, chunky

sauce, and medium flavored sausage.
The Kings brand pizza has a thin crust, a cheese blend, smooth sauce,
and mild-flavored sausage.
For C1: Utility or PW of Antonios =2+6+17+27=52; Kings =

Salem Problem: Choice of Pizza attributes

This can be modeled as an Integer
programming problem:
Problem def: Salem has to design a Pizza with
highest utility for sufficient people so as to
justify the design and launch of the new
product.
Variables :
lij = 1 if Salem chooses level i for attribute j, = 0 otherwise
yk =1 if customer chooses Salem Pizza, =0 otherwise
Because number of customers choosing Salem Pizza has to be
maximized,
Obj Fn= Max y1+ y2+ y3+ y4+ y5 + y6 + y7+ y8

Problem formulation for Salem Foods

Thus the problem requires that if C 1 has to switch PW or
utility > 52 the current PW for Antonios brand.
Since y1 =1 only when customer buys from Salem, so we
write this above expression for consumer 1 as
Thus for all 8 consumers, of which 1,4,6,7,8 prefer
Antonios and2,3,5 prefer kings

Additional constraints to ensure that

only one attribute gets chosen

This problem can now be solved using Management Scientist or

Lindo/Lingo.
Soln: yields the result that Salem must choose Thin crust, Cheese
blend, Chunky Sauce and Mild sausage flavor. Consumer types C1,
C2, C6 and C7 will choose this pizza type.