What Is Choice-Based Conjoint Analysis and How Can It Help Me Plan My Marketing Mix Modeling?
One of the off shoots of Game Theory is ChoiceBasedConjointAnalysis (CBC), which is often used in Market Research to understand how people choose when presented with different product or service options. This in-turn helps businesses identify the more important features that drive consumer preferences and influence decision-making, and thereby impact sales and other key performance indicators. Thus, this technique is often used to strategize a company’s Marketing Mix Modeling (MMM). This is typically done by analyzing different components of the marketing mix (such as advertising, pricing, distribution, promotions, etc.) in terms of their contributions in driving business outcomes.
Below are a few examples of how Market Researchers use the CBC to plan the MMM:
- Guide Product Design and Product Pricing strategies in the conceptualization / development stage of a Product Life Cycle
- Understand the relative importance of the various elements creating the current marketing mix (in terms of Consumer Behaviour)
- Understand Trade Offs by providing insights into how consumers choose between one attribute / feature for another
- It also allows for simulating different scenarios by manipulating attributes / market conditions. This is then used in forecasting the potential impact of changes to the marketing mix elements and understanding / preparing the impact thereof.
All the above measures enable marketers to optimize their Go To Market Strategies, via data driven decisions based on a more nuanced understanding of consumer preferences, and thus drive Sustainable Business Growth.
If you found this interesting, please do reach out to us to see how we can help you drive data driven business growth.
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