Conjoint Analysis Redesigning Product Lines With Conjoint Essay

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Conjoint Analysis

Redesigning Product Lines with Conjoint Analysis:

How Sunbeam Does It

What are the strengths & weakness of the studies ?

The Sunbeam Appliance Company (SAC) division is facing the challenge of differentiating their core product lines, as they are rapidly maturing and losing market share and profits. The decision to pursue conjoint analysis is made to accomplish the following goals. First, Sunbeam wants to know what models need to be in the product line, what their physical appearance needs to be what their performance characteristics also need to be (Page, Rosenbaum, 1987). What follows is an analysis of the strengths and weaknesses of these studies and what Sunbeam could have done differently to minimize the study's weaknesses, which are many.

Strengths

The following are the key strengths of the conjoint analysis studies taken on by Sunbeam in an effort to reposition and profitably grow their food processor line. First, the studies successfully show why the models in the Sunbeam product family are losing market share to other competitors. One of the greatest benefits of conjoint analysis is that it is a technique that can define orthogonal distance between attributes of products within product liens and across competitors (Green, Krieger, Carroll, 1987). Sunbeam has done this well and quickly gets an appreciation of just how far behind they are from competitors.

Second, Sunbeam wants to use conjoint analysis to define the optimal levels of market share by each product and product category, an accomplishment that is attained twice in the course of the conjoint studies (Page, Rosenbaum, 1987). This analysis points to deeper issues in their product line and branding than conjoint analysis will be able to solve however.

Third, the conjoint analysis successfully isolates the features, appearance, configuration and at a rudimentary level, price point that the food processor models with the most potential should be delivered at. This is a good first pass at triangulating all of these variables together yet for constraint analysis to deliver valuable segmentation-based insights it must also be iterative in nature (Green, Krieger, 1991).

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Fourth, the conjoint analysis has successfully defined price points to the band level. It has also shown that the price is defining brand identity at the low-end of the market, where customers who shop on price are. Using conjoint analysis to define segmentation based on price needs to also be specifically designed to measure how variations in features impact perceived price parity and price/performance of a given product (Wyner, 1992). In summary, the strengths of the conjoint analysis show that it was executed well from a purely technical standpoint yet still doesn't have many of the attributes of an effective conjoint analysis that can be used for the long-term. Sunbeam has much more work to do in order to really answer the questions they have from a strategic standpoint.

Weaknesses

There are many weaknesses with the implementation of the conjoint analysis done by Sunbeam. Ironically the methodology includes 27 orthogonal arrays and 12 attributes yet the conclusions yield little in the way of disruptive innovation to the product line. This is the first of several flaws in the methodology. With so much complexity of arrays and attributes it is no wonder they eventually end up only making a small increase (2%) in market share. They are testing what they already have and lost a major opportunity to discover what the next technology or appliance is that would eventually render food processors obsolete.

Second, the methodology itself is seriously flawed. From….....

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