We’ve all been told that if we produce a product with all the features someone could possibly want and sell it at a reasonable price, it is sure to be profitable. But is that really true?
Not usually, and we all know that. One could say “life is a conjoint,” meaning it is full of trade-offs. Over-committing on a product and spending large amounts to have it include all of the potentially desirable features can lead to negative ROI. But what’s the optimal mix of features? And what’s the optimal price to not only make the product appealing to consumers but also provide the value they are looking for? Short of making products made to order or too costly for most consumers to consider, what course of action can you take?
Start by taking your product and considering everything you can offer as features / options, the first step in a conjoint, i.e., trade-off study. Then take all of the variations those features can have and the various price points, as well as other factors affecting the value proposition such as service channels. Considering and compiling this information can lead you down the right road with the help of consumers.
For example, say you’re designing the ultimate travel recognition program for a hotel chain. What types of benefits should you include in the package? Would your guests prefer amenities, such as newspapers, snacks, or free high speed internet? Would they like free upgrades? Would they want priority for reservations? Should you give them special access to services, such as a dedicated reservation number? The table below shows how the problem may be defined in terms of “attributes” and “levels.”
Conducting a test market of your product and having consumers tell you to what degree they might consider a specific version can inform your decisions about the design of your product.
Here is where Rockbridge comes in. Our MaxProduct™ is a conjoint tool that has helped companies determine what their ‘ultimate product’ should have and has provided the tools to allow decision makers the power to simulate variations and see their effects on market share and sales.
MaxProduct™ is based on a proprietary hybrid-conjoint methodology. This is one of many trade-off methods we apply for clients, others including discrete choice, full-profile or adaptive conjoints, and Max/Diff. MaxProduct™ is effective when there is a singular focus on product design, and a large number of features are under consideration. The features may include product attributes, brand, service channels and price points. The method is able to capture these features in a study without a time-consuming or complicated questionnaire, which means the study can be completed faster and the budget is more affordable.