Developing marketing strategies using conjoint analysis

Abstract

Business achievements of every company directly depend on the level of customer satisfaction. Successful marketing strategies are based on the recognition of the customers' desires, needs and behavior. In order to satisfy the customers' needs, as well as to achieve the companies' goals managers are enforced to make decisions regarding various aspects of business. For example, marketing managers are often faced with numerous difficult tasks regarding assessment of future profitability, sales, and market share for new product entries or customers' reaction to modifications of existing products or strategies. Managers want to recognize the customers' reaction to the existing products and services, which features of products or services make them attractive and how much customers are willing to pay for such a product or for its particular characteristic. Each of the identified managers' problems may be addressed and solved using the Conjoint analysis methodology. The goal of the Conjoint analysis is to evaluate customer preferences and to understand and explain customers' main motives for purchasing. The information gained by the Conjoint analysis indicate customers' real needs, allows for the preference based segmentation and answer why costumers prefer one particular product among all the others. Using this information, managers can focus on most important characteristics of products and services in order to attract new customers and keep existing ones.