Authors
Dr. M Ajoy Kumar
Siddaganga Institute of Technology
Muralidhara A
JMP
Objective
Study the application of regression and concepts related to choice modeling (also called conjoint analysis) to understand and analyze the importance of the product attributes and their levels influencing the preferences.
Background
Joseph runs a musical instrument shop. Of the many products he manufactures and sells, flutes are the leading musical instrument. The perceived quality of the flute depends on the method (how it was made): by hand, by machine or by a combination of the two (hybrid). The material can be bamboo, plastic, or metal. Joseph then chooses three price levels that he thinks are affordable for his customers.
The Task
Joseph wants to find out which of the combinations are most preferred by customers. He also wants to understand the perceived utility and importance of the three attributes so that he can plan further for mass production. Joseph wants to know the type of instrument to be produced and its assigned price.
Each of the product attributes, namely material, method and price have three levels each, resulting in a total of 27 profiles or combinations. This is considered as full factorial design. Due to lack of resources, Joseph decides to go for a fraction of the factorial design and chooses only nine combinations out of 27. He created a fractional factorial design using JMP as shown in the exhibit 1 (see PDF).
After creating 9 unique combinations, each profile is given an ID and the description of the of the profiles is shown in Exhibit 2 (see PDF).