1 Lecture / 1 Exercise
This is a suggested curriculum for either undergraduate or graduate students in fields such as business, marketing, economics, or engineering. The purpose is to introduce students to conjoint analysis in a non-technical manner. This program may be taught as a single lecture and a set of short readings, followed by an exercise taking at most 30 minutes to complete.
Day 1: Intro to Conjoint Analysis and Choice-Based Conjoint (CBC)
- Presentation #1 Conjoint Analysis (Power Point Slides)
- Presentation #1 Conjoint Analysis (YouTube Video)
- Access the sample CBC survey on food preferences at a baseball game (http://www.sawtoothsoftware.com/baseball) and complete the questionnaire. Answer the questions realistically, to reflect your opinions and preferences. At the end of the interview, the website displays how often you chose each food item, each wait time, and each price level. It also shows results for all respondents who have completed the survey to this point.
- What was the survey experience like? Do the results seem to reflect your preferences?
- Examine the demand curve table (two-way counts, food item x price) and line chart displayed for the total sample, showing how often all respondents chose each food item at each price. For which food items are respondents most sensitive and least sensitive to price changes (this is the notion of price elasticity)? Does this make sense given what you know about human behavior?
- Finally, use the market simulator that appears on the screen following the line chart of demand curves. If all other food items remain at their existing (base case) wait times and prices, what price should be charged for crab sandwich to maximize its relative revenue? (Hint: relative revenue is computed as share of preference x price).