Étude de l'entreprise Forte Hotel Design (document en anglais)

Case -Forte Hotel Design

1. What is conjoint analysis? When would a marketer/company use conjoint analysis? Explain the process of conjoint analysis that we did in class. Explain any problems that rating bundles would have?

Conjoint analysis is used in market research and is a technique to determine how people value different attributes that define a specific product or service being offered.

Marketers are looking to determine what the ultimate combination of attributes is, that is the most influential on respondent choice and conjoint analysis would be of perfect utilization for when companies are looking for a decision making solution.

Rating bundles may have problems when it comes to respondent biases. That being said, there are numerous factors that influence bias when rating product bundles. The first being discussed is recency effect, that skews the ratings because the way the questions are ordered in their sequence. A second bias is the central tendency bias, where the bundles are not able to be differentiated based on which ones the respondents prefer over the others. When respondents give feedback scores of the bundles all in the mid range of the scale, instead of giving either one end of the spectrum or the other is when this bias most commonly occurs. Another bias similar to the last, the contrast effect is when there is a tendency to rate bundles relative to other bundles instead of how they should be rated, by personal preference. Using other attributes that are not a part of the analysis may cause bias as well, as other attributes may be of preferred choice for respondents. Noting that the biases mentioned can influence a respondent’s ratings is of importance, as the influence can affect the results of the conjoint analysis.

2. Did the analysis work for your group, and why would it not work perfectly?

Yes, the analysis did work for our group.

To show this, we listed the preferred profiles for all members:

Allen - Large (7), Internet (34), Exercise and Pool (28), Video Tape (30) and Yes to Delivery (1). (7+34+28+30+1=100)

Reilly - Office (18), Internet (27), Exercise Room (13), Complimentary Fruit (14) or Free Newspaper (14), Yes to Delivery (28). (18+27+13+14+28=100)

Hao – Large (21), Internet (33), Small Pool and Exercise Room (26), Complimentary Fruit and Cheese Bowl (14), No to Delivery (6). (21+33+26+14+1=100)

As you can see, the respondent’s scores all add to 100, but the attributes that add up to this level all vary based on preference. There are times when some attributes have a lower value of preference over others, which can create a trade-off. It is because of these trade-offs that we can the analysis can work properly, since there will be no bias involved in the decision making process.

3. Explain the difference between First choice rule and Share of Preference rule? Using new product profile, what is the estimated market share and revenue and what product would you recommend?

First choice rule, also known as the maximum utility rule, is when customers are highly involved within a purchase decision. The consumer will choose the product that offers them the highest value without thinking of its alternatives. For example, we can relate this rule to those who are very brand loyal to a specific brand. If someone really loves a Canada Goose jacket for example, they will ignore any other jacket brands and go straight for a Canada Goose, no matter what the price is. Clothing is a good example for first choice rule as well as cars or airline flights.

In the market share and revenue index simulations table that uses the first choice rule, we see the highest market share amongst the Professional 1 and with tourist who both have a market share of 12.5. (Refer back to TABLE 3A: First-Choice Rule)

Share Preference rule, also known as share of utility rule, are when consumers have a low involvement in the purchase decision and they are purchasing products far more frequently. The consumer will select the product with a probability that it’s proportional to the utility of those compared to the total utility from all of the alternatives. Consumers buying these products will be buying based on convenience. Such examples can include everyday items such as toothpaste and groceries where consumers usually choose products based on low prices and whether it’s easily accessible to them and gets the job done.

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