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OPSM 405 Service Management

Class 10:

Conjoint Analysis using Excel

Koç University

Zeynep Aksinzaksin@ku.edu.tr

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Overview of method

Service characterized by attributes Each attribute has a limited number of levels Ask individuals about their preferences

– On a selected group of combinations– On all possible combinations

We will assume that preferences are expressed in terms of ratings

Analyze ratings (using linear regression) to develop a value system for each individual

Perform output analysis

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Doing basic conjoint in Excel: design of a sweater

Consider 3 attributes: fabric (cotton, polyester, lambswool); color (red, blue); price (50, 100, or 150 YTL)

Full-factorial experimental design: (3)(2)(3)=18 product concepts

Ratings on a scale of 0-10 (least-highest preference) Code data in Excel (removing linear dependency) Perform multiple regression in Excel Spreadsheet available on F drive

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Step by step procedure

Collect preference data: want to have at least as many cards as variables to be estimated

Code using “dummy coding”:1 if feature present, 0 otherwise

Remove linear dependency, take reference level as 0

Perform simple multiple regression:

Y=b1(P)+b2(L)+b3(Blue)+b4(100)+b5(150)+ constant+error

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In class exercise

Designing a new breakfast buffet for KU Will serve breakfast items; trying to

understand valuations Attributes:

– Drink: coffee, tea, juice– Basics: Simit, acma, toast– Extras: Omelette, fruit, cheese– Price: value, Divan, premium

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Rate the following cards based on your own preferences

#1: Tea, Toast, Omelette, Value #2: Tea, Simit, Cheese, Premium #3: Coffee, Toast, Fruit, Premium #4: Juice, Toast, Cheese, Divan #5: Juice, Simit, Fruit, Cheap #6: Juice, Acma, Omelette, Premium #7: Coffee, Simit, Omelette, Divan #8: Tea, Acma, Fruit, Divan #9: Coffee, Acma, Cheese, Cheap #10: Tea, Acma, Omelette, Premium #11: Coffee, Toast, Omelette, Premium #12: Juice, Simit, Cheese, Divan #13: Tea, Simit, Omelette, Divan #14: Coffee, Acma, Fruit, Cheap #15: Juice, Acma, Fruit, Premium