Saving time and money using Conjoint in New Product Development

At CMR we are often asked how market research can help clients ensure they deliver products that genuinely meet the needs of the market.

Aside from using qualitative techniques to really dig into those needs, here at CMR we are big advocates of conjoint analysis. Conjoint analysis is nothing new, dating back to the 1960s, but advances in software mean its use is no longer restricted to stuffy academics and statistical whizz-kids.

In simple terms conjoint helps us understand how differences in the features of a product affect consumer decision making. What features are going to make a patient select a particular blood pressure monitor? What will encourage an anaesthetist to use one spinal kit over another?

The Conjoint approach enables us to model product features and understand the value that consumers place on each one relative to others. Every product has a range of features such as size, weight, material composition or price. For every feature there are numerous possibilities; the size of an insulin pen for example may be 10cm, 12.3cm or 15.6cm. Whilst these possibilities are endless, device manufacturers will always be working within the bounds of cost and technical feasibility, no doubt having a range of variants in mind. Gaining clarity around these variants to enable development of the most attractive product is the key benefit of conjoint.

Conjoint analysis can provide answers that encompass a number of areas:

Price – what is the price elasticity of demand? For which features will consumers pay a premium?

Utility – which features are most useful and provide greatest value to consumers? Which features are more influential when it comes to choice?

Overall profile – Which combination of feature levels will drive the greatest demand? What is the minimum acceptable profile in order to gain the required market share?

Conjoint analysis can also provide an insight into the likely performance of a product within an existing market. By feeding in the specific features of competitor products, it is possible to assess how consumers may react to a new product and the extent to which they may favour it over their existing choice. Likewise, if a manufacturer already has its own product in the market, conjoint analysis can be used to gauge the degree of cannibalisation that a new product may generate.

In two recent projects carried out by CMR we have enabled clients to confidently and clearly settle on a set of features that they believe will give them the edge in their respective markets. The first was for an entirely new product, created from scratch following a qualitative exploration of unmet needs among surgeons. Once the surgeons had outlined their needs and defined the most desirable format for the product our client’s development team came up with a firm concept.

The Conjoint approach was used to pin down the specific feature levels, identifying the must-haves and delighters to settle on the most desirable product spec.

In the second project the client was seeking to enter a highly competitive sector with a new, low-end product. Conjoint was used to identify which elements were critical and which could be sacrificed for a reduction in price.

In a market where ill-judged product development can cost many millions of dollars, euros or pounds, we believe the conjoint analysis approach represents a critical tool in the product development process.