20 CHAPTER 3 REVIEW OF CONJOINT ANALYSIS THEORY ...

the particular product or services. According to a survey by Cattin and Wittink (1982),
approximately sixty percent of all conjoint studies are related to consumer goods, twenty
percent to industrial goods, and the remaining 20 percent are performed for transportation
and financial services. These applications were used primarily for new product/concept
evaluation and pricing decisions. Conjoint analysis has also proven very successful in
market segmentation. (Green and Srinvasan 1978). Heterogeneous groups of consumers
are divided into homogeneous segments so different marketing strategies can be tailored
to each segment.
Conjoint analysis provides valuable information about bundles of attributes that
represent potential products or services for consumers. CA therefore provides researchers
with insight into the composition of consumer preferences by examining the attributes
that are most or least important to the consumers. These attributes form the basis for a
decision criteria that a respondent uses to choose products or services. In CA, products or
services are referred to as profiles, treatments, or a stimulus. Consumer preferences,
needs, and attitudes are reflected in their choices among product profiles. A profile is
defined as a hypothetical product consisting of different attribute - levels as shown by
diagram 2.1 below.
Profile
A3
B2
C1
Attribute A
Attribute B
Attribute C
Level A1, A2 or A3
Level B1, B2 or B3
Level C1, C2, or C3
Figure 3.1 Relationship Among Profile, Attributes and Levels.
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