Lecture 1

Question 1

Problems of Rating Based Conjoint

Answer 1

• Not realistic
• Not clear weather spread in ratings is due to real preferences or due to response style
• Implications for sales levels and market shares are not clear

Question 2

Advantages of Choice Based Conjoint (6)

Answer 2

1. Trade offs are enforced even more
2. Realistic, the choice-setting mimics real life
3. No-choice option -> Sales proxy
4. Avoids the need of ad-hoc rules to predict market shares
5. No subjective scaling
6. Choice is cognitively less demanding

Question 3

What are the three levels of Analysis?

Answer 3

1. Aggregate level
2. Segment level
3. Individual level

Question 4

Aggregate level

Answer 4

+ high precision

• Assume same preferences may give misleading results
• -> LOGIT

Question 5

Segment level

Answer 5

+ Realistic, takes into account different segments
+ High precision
–> LCA

Question 6

Individual level

Answer 6

+ Realistic, takes into account different segments
+ High precision
- How many strategies should the firm implement given the diversity of preferences?
–> HB

Question 7

Why Conjoint?

Answer 7

• You cant say you want all
• It enforces trade offs
• Reduces socially desirable answers
• Adds realism
• Straightforward

Question 8

Disadvantages of Conjoint

Answer 8

• Only small number of attributes can be included

- High-involvement search (People need to understand the attributes and levels)