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05 The optimal product concept for Forte Hotel among the four new product profiles is Professional 2, for several reasons: it has the lowest incremental
05 The optimal product concept for Forte Hotel among the four new product profiles is Professional 2, for several reasons: it has the lowest incremental cost for construction ($2500) and the lowest average decrease in margin per day ($-3); it is composed by attributes levels that have the highest average preference from respondents (359%); it has the highest predicted market share (17%%) and revenue weighted by market share (17) out of the four product profiles; it allows Forte to reach the maximum profitability considering its low flexibility on the room price and a cost leadership in the actual market; it is the less similar option, among the four, from the existing product profiles. (Exhibit 2, Graph 1) 06 The software suggests that Optimal Product 5 profile (Small suite + Room fax + Pool + Shoe shine + No restaurant delivery) is more profitable than Professional 2: it will yield larger revenue per unit (102 vs 101), weighted revenue (18 vs 17) and market share (18% vs 179%). Its attribute levels combination provides also a lower decrease in margin per room per day ($-2) and it matches respondents preferences (38%%) more than Professional 2. Despite that, the meaningful increase in costs for construction (+$1130 per room) will make Optimal Product 5's additional revenues (+$2 per room per day) irrelevant for the company for the launching of the new product concept. Thus, Professional 2 is still the best alternative. (Table 3, Table 4, Exhibit 3, Graph 2) 07 Advantages: . Finds out how respondents trade off among different product attributes
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