ABSTRACT
This chapter begins with the basic principles of conjoint analysis. It presents a pricing scenario as a choice situation. The chapter specifies the basic conjoint model as a linear regression model. It describes what a consumer will see in a conjoint study and how data are collected. The chapter provides advice on how to specify the price variable. It lays the foundations for the experimental design concepts used in conjoint design, and discusses estimation methods. The chapter illustrates utility calculations and shows some standard utility analyses. It also discusses several software packages in detail. The advantage of ordinary least squares is that most pricing analysts are familiar with the basics of regression and all statistical software packages have it. The chapter also provides information on the technical details of dummy coding. There are two issues for dummy coding: multicollinearity and interpretation.
