Best Motor Works (BMW) competes in the luxury car market.

Your Market Research Team has conducted a study on 1,500 respondents using choice-based conjoint analysis for three attributes, each attribute having two levels (refer to Excel file for Dataset 2 tab):

Attribute b1 (Price)

Attribute b2 (Brand)

Attribute 3 (Number of Doors)

$55,000 $90,000

Buzzy Beaut

2 door sports convertible 4 door family sedan

The alternatives in the questionnaire are presented in Table 1:

Table1: Alternatives in the Conjoint Analysis for BMW

Alternatives

Price Number of ($1,000) Brand Doors

b0b1 b2 b3

1 55 Buzzy

2*

3 55 Beaut

4*

5 90 Buzzy

8 90 Beaut Note: *existing product structure

To generate an informed report for BMW, individually, you need to:

2 door 2 door 2 door

4 door

55	Buzzy 4 door

55	Beaut 4 door

6*

7*

90	Buzzy 4 door
90	Beaut 2 door

1. 1) Use the file Conjoint_BMW_SP5-2021, to calculate the part worths, and the dollar value for a Beaut brand. [2 marks]

2. 2) Estimate the market shares (choice probabilities) for all eight alternatives. Briefly comment on your results. [1 mark]

3. 3) Re-estimate the market shares, given that in the current market there are only four alternatives (2, 4, 6, and 7)*. Briefly comment on your results.

Message me for the Conjoint_BMW_SP5-2021 file

A B C D E F G H J K L M N o Q R S 1 Marketing Analytics 2 Conjoint Analysis 3 This program undertakes Conjoint Analysis Copyright (c) Cam M Rungie 2002 4 5 Instruction: Use Solver to estimate, b1,b2,b3 6 7 Use solver to generate the estimates of the part worths 8 loglikelihood 9 Coefficient Values #NUM! 10 Partworths 11 bo 0 12 Price b1 0.0000 13 Brand b2 0.0000 14 Doors b3 0.0000 15 16 17 This table calculates the utilities for each of the alternatives 18 and is based on the coefficients. 19 20 Alternative bo b1 b2 b3 Utility 21 1 0 0.0000 22 2 0 0.0000 0.0000 23 3 0 0.0000 0.0000 24 4 0 0.0000 0.0000 0.0000 25 5 0 0.0000 0.0000 26 6 0 0.0000 0.0000 0.0000 27 7 0 0.0000 0.0000 0.0000 28 8 0 0.0000 0.0000 0.0000 0.0000 29 This table calculates conditional choice probabilities Exponential Choice Alternative of utility Probability 1 1.0000 13% 2 1.0000 13% 3 1.0000 13% 4 1.0000 13% 5 1.0000 13% 6 1.0000 13% 7 1.0000 13% 8 1.0000 13% 8.0000 100% Table 1: Alternatives in the Conjoint Analysis for BMW Alternatives Price ($) Brand Number of Doors bo b1 b2 b3 1 0 $55 Buzzy 2 door 2* 0 $55 Buzzy 4 door 3 0 $55 Beaut 2 door 4* 0 $55 Beaut 4 door 5 0 $90 Buzzy 2 door 6* 0 $90 Buzzy 4 door 7* $90 Beaut 2 door 8 0 $90 Beaut 4 door Note: *existing product structure 0 A B C D E F G H J K L M N o Q R S 1 Marketing Analytics 2 Conjoint Analysis 3 This program undertakes Conjoint Analysis Copyright (c) Cam M Rungie 2002 4 5 Instruction: Use Solver to estimate, b1,b2,b3 6 7 Use solver to generate the estimates of the part worths 8 loglikelihood 9 Coefficient Values #NUM! 10 Partworths 11 bo 0 12 Price b1 0.0000 13 Brand b2 0.0000 14 Doors b3 0.0000 15 16 17 This table calculates the utilities for each of the alternatives 18 and is based on the coefficients. 19 20 Alternative bo b1 b2 b3 Utility 21 1 0 0.0000 22 2 0 0.0000 0.0000 23 3 0 0.0000 0.0000 24 4 0 0.0000 0.0000 0.0000 25 5 0 0.0000 0.0000 26 6 0 0.0000 0.0000 0.0000 27 7 0 0.0000 0.0000 0.0000 28 8 0 0.0000 0.0000 0.0000 0.0000 29 This table calculates conditional choice probabilities Exponential Choice Alternative of utility Probability 1 1.0000 13% 2 1.0000 13% 3 1.0000 13% 4 1.0000 13% 5 1.0000 13% 6 1.0000 13% 7 1.0000 13% 8 1.0000 13% 8.0000 100% Table 1: Alternatives in the Conjoint Analysis for BMW Alternatives Price ($) Brand Number of Doors bo b1 b2 b3 1 0 $55 Buzzy 2 door 2* 0 $55 Buzzy 4 door 3 0 $55 Beaut 2 door 4* 0 $55 Beaut 4 door 5 0 $90 Buzzy 2 door 6* 0 $90 Buzzy 4 door 7* $90 Beaut 2 door 8 0 $90 Beaut 4 door Note: *existing product structure 0