Solving marketing problems with conjoint analysis∗

Conjoint analysis has become a popular research tool after its introduction in marketing in 1971 by Green and Rao. Both the academic as well as the commercial community have shown a strong interest in the conjoint methodology. In the academic literature attention is either directed at methodological issues or is aimed at application issues. A considerable amount of academic research is now available, both in the field of marketing as well as in other disciplines. The methodological developments have been reviewed extensively, as well as the commercial use of conjoint analysis. In the academic literature no systematic evaluation of the developments in the area of applications has been given. In this article we aim to fill this gap in the literature. After a brief discussion of the basic concepts of conjoint analysis we discuss the range of marketing problems which can be addressed by conjoint analysis. Issues to which attention is addressed include among others: (1) strategic issues, (2) segmentation issues, (3) product related issues (including market simulations), (4) pricing issues, (5) distribution issues and (6) promotion and advertising issues. For each kind of issue the applicability of conjoint analysis is systematically reviewed. By classifying the applications according to the research purpose (i.e. the marketing problem) we obtain insight into the areas in which conjoint analysis may be successfully applied. In addition, a brief discussion of the types of products (e.g. consumer durables, fast moving consumer goods, industrial goods, etc.) to which conjoint analysis may be applied is provided. Finally, we also comment on the limitations of the methodology with respect to its applicability.