Conjoint analysis (CA) provides an indirect way to measure customers' preferences by their stated willingness to pay. Manufactures have used CA to refine and extend their product lines. In an application to hotel industry, Hilton Groups used CA to estimate the trade-off between features and price before introducing customized checking, which brought a big success to the company.

Based on their market research, the following tables provides a short form of their CA stimuli and analysis:

Attribute

Levels

Customized checking

Yes, no

Special food and beverage packages

Yes, no

Average Price (per room)

$150, $250, $350

Hypothetical product

Actual ranks

Predicted ranks

Regular checking (no customization) with no special package for $150

9

Regular checking (no customization) with special package for $150

7

Regular checking (no customization) with no special package for $250

11

Regular checking (no customization) with special package for $250

8

Regular checking (no customization) with no special package for $350

12

Regular checking (no customization) with special package for $350

10

Customized checking with no special package for $150

6

Customized checking with special package for $150

3

Customized checking with no special package for $250

5

Customized checking with special package for $250

1

Customized checking with no special package for $350

4

Customized checking with special package for $350

2

Based on the above tables and charts, answer with relevant explanations the following questions: (15 points)

Fill out the predicted ranks column in the table. Explain how you selected the ranks.

[Hint: read each line from the product table, identify respective levels of each attribute on each graph, add the utility values from each graph, then write the total on last column. Once you finis rows, rank the sums you have just filled out. ]

Rank the product attributes based on their calculated importance scores (show calculations).

[Hint: compute individual range from each graph, e.g., (5.1-2), (4.5-2.2), (5.5-2.25), sum three ranges, divide each range by sum of three ranges, which gives you importance score of each attribute ]

Explain your choice of most and least preferred product options for Hilton?

[Hint: just identify the top and lowest rank from your calculated total]

If Hilton already had in their product portfolio, regular checking with special package at $250, what would be your suggested improvements for the product team and why? [identify where Hilton is located currently, and suggest how ranks change if you change one attribute at a time, e.g. lower prices, or add custom checking, without changing others. The change that gives you highest improvement in rankings, would be recommended]

How would you change this study to a choice based conjoint analysis? [adaptive choice based conjoint]