MKTG2013 - Assignment 1 This assignment is based on real-world data from a banking transaction account preference conjoint study conducted by a major regional bank. Liberty Bank conducted a conjoint study to find out how valuable different attributes of everyday transaction accounts were to its customers, and to identify the account that best serves the needs of customers. The bank was particularly interested in three attributes - minimum monthly balance required to waive monthly service fee (MINBAL), monthly service fee (FEE), and the ability to withdraw cash from other network ATMs (ON ATMs), i.e., from ATMs of other banks. Each of these attributes can take one of the three levels listed below. MINBAL - Minimum monthly balance required to waive a monthly service fee. . $0 versus $500 versus $1000 FEE - Monthly service fee. . $0 versus $3 versus $6 ON ATM -Availability and cost for using ATM networks of other banks. . not available versus available and free versus available but costs $0.75 per transaction. The study used a fractional factorial design in which respondents were asked to rank their preferences from most to least preferred for nine Liberty transaction accounts listed below. Profile Minimum Monthly Availability and cost for using ATM balance fee networks of other banks $6 No ON ATM access 2 $0 $0 Free ON ATM access 3 $0 $3 $0.75 per transaction for ON ATM use 4 $500 $3 Free ON ATM access 5 $500 $6 $0.75 per transaction for ON ATM use 6 $500 SO No ON ATM access 7 $1,000 $0.75 per transaction for ON ATM use $1,000 $3 No ON ATM access 9 $1,000 $6 Free ON ATM accessBesides the preference ranking of bank accounts, the study also collected demographic and lifestyle characteristics of respondents, which allowed the bank to group customers into three major segments. Segment Segment Typical services used Demographic number description composition Disengaged Basic transaction account Less educated, elderly, lower income 2 Traditional Regular services such as Families, middle income transaction accounts and home loans 3 Sophisticated Broader range of services College educated, including online savings, professionals, higher personal loans, and credit cards. income You have been involved as a consultant by Liberty Bank's Marketing Department to help analyse the conjoint data and identify the best transaction product to offer. The dataset contains the bank account preferences and segment membership information (i.e. segments to which each respondent belongs to) for 18 respondents. Note: Preferences are obtained by reverse coding the ranks assigned by respondents to different accounts and so, you can use the preferences directly as the Y variable in the egression analysis) The data set also shows the segment sizes and estimated average monthly bank account balances for the three segments. The profit that the bank gets from an account depends on the average monthly balance in the account and margin that the bank makes on that account balance (i.e. profit from an account = average monthly balance x percentage margin). Projected percentage margin that the bank will make on account balances for each of the nine accounts (i.e. the margins (%) that Liberty Bank makes on account balances) is also given in he dataset.Bank account product profiles Liberty Bank Minimum balance Fee ON ATM account profile $500 $1,000 $3 $6 Free $0.75 1 0 0 Respondent segment Respondent ID 1 S 10 11 12 13 14 15 16 17 18 1 N / Segment 3 N 2 3 3 3 1 Respondent preferences Liberty Bank Respondent ID account profile 1 10 15 Estimating Part-worths Respondent ID 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Intercept 8.333333333 8.666666667 8 9.33333333 8.333333333 5.333333333 8.56666667 7.33333333 7 6.666666667 7.333333333 3.666666667 6.333333333 3 2.666666667 5 2.333333333 3.333333333 Minbal - $500 -3 -3 -0.666667 -3.33333333 -3 -0.33333333 0.666666667 -1.33333333 -1.66666667 -1 0.333333333 -0.66666667 -1.66666667 0.666666667 Minbal - $1000 -6 -6 -1.333333 -5.66666667 -6 3.14018E-16 -6 -6 -1 66666667 0.333333333 -2.66666667 -3.33333333 -0.33333333 -0.33333333 -2.33333333 0.333333333 -3 Fee-$3 -0.33333333 -7.85046E-17 -3 -1.33333333 -0.33333333 -3 -0.6666667 -0.3333333 -1 -1 66666667 -1.33333333 0.333333333 -0.33333333 -1 -70654E-16 -0.66566667 1 0.333333333 Fee - $6 -1.66666667 -1 -5 -2.66666667 -1.66666667 -5 -1.3333333 -0.6666667 -3 -5.33333333 -4.66666667 -0.33333333 -3.66666667 -2 -1 -0.33333333 -1 -0.33333333 ON ATM - free 0.666666667 3.14018E-16 0.666667 -9.4698E-17 0.666656667 0.33333333 166666667 0.333333333 0.666666667 5 0.666666667 5.666666667 5.666666667 5.333333333 5.333333333 ON ATM - 5.75 0.333333333 0.333333 -2.41736-16 0.333333333 3 -0.3333333 1.33333333 -0.33333333 0.333333333 4 0.333333333 3.333333333 3.333333333 3.666666667 3.666666667Range of Part-worths Respondent ID 1 2 3 Minba 4 5 60000 6 60000 7 1.3333 5.6667 9 6.0000 10 1 0000 11 6.0000 12 5.0000 13 Fee 14 1 6667 16 10000 5 0000 1 6667 2.6667 0.6667 15 1 6667 50000 2.6667 1.3333 3.3333 1 0000 17 18 ON ATM 0.3333 1 0000 0.3333 0.6667 10000 0.6667 0.6667 2.3333 0.6667 3.0000 Total 0.0000 0.3333 5.3333 0.0000 4.6667 0.6667 3.0000 0.3333 3.6667 20000 8.0000 0.6667 6.6667 8.3333 0.6667 8.0000 0.3333 10000 0.6667 6.0000 10000 1 0000 0.6667 8.0000 1 0000 7.0000 0.3333 5.3333 2.3333 6.3333 2.3333 8.3333 3.0000 1 6667 5.0000 1 6567 50000 5.0000 4.0000 Attribute Importances 6.0000 3.3333 5.3333 Respondent ID 1 2 3 4 Minbal 5 6 750095 75 0095 7 20.0095 8 68 0095 9 10 500% 16.67% 11 12 13 Fee 14 15 20.83% 12.50% 75 0095 75.00% 35.7195 1 2595 16 17 18 ON ATM 32.00% 20.83% 10.53% 13.33% 32 00% 66.675 20.0095 13.33% 1.1795 16.675 38 8995 12.50% 16.679% 9.52% 20 009% 5.009 1.0095 56.259% 56.2595 4.17% 84.21% 100%% 56.00% 8.33% 3.33% 4.769 73.3395 12.50% 10.00% 5.269% 25 00% 12.00% 1.119 20.00% 10.0095 6.6795 2.50% 46.679% 58.33% Existing competitor bank account profiles 50.0095 50.0095 1.25% Minbal - $500 Minbal - $1000 Fee-$3 Enterprise account Fee - $6 0 ON ATM - free ON ATM - $.75 Origin account 0 0 0 Utilities Utilities of existing competitor bank accounts Competitor transaction Respondent ID accounts 1 2 3 4 Enterprise account 5 40000 6 9 10 11 12 13 Origin account 14 15 16 17 18 Utilities of new (Liberty bank's] bank accounts Liberty Bank Respondent ID account profile 2 4 5 6 1.6667 7 -1 0000 B -5.000 2.6667 9 10 1 6667 11 0.6667 5.0000 12 13 15 DODO C 1.3333 0.6667 14 16 17 0.6667 18 0.0000 3.0000 0.6667 -5.3333 3.0000 -4.6667 0.3333 0.3333 1 6667 0.3333 3.6667 2 0000 -1 0000 0.0000 0.3333 1 0000 2 6667 1 0000 1.3333 -0.3333 0.0000 0.6667 2 0000 5.0000 0.6667 5.6667 2.6667 0.0000 5.6667 4.0000 -3.0000 3.0000 1 0000 1 0000 5.3333 4.6667 1.3333 1.3333 5.3333 4.3333 2.6667 10000 0.3333 0.0000 2.3333 50000 3.3333 1.3333 5.3333 -1 6667 6.0000 1 0000 4.3333 0.3333 1 0000 0.6667 3.3333 0.3333 4.6667 3.6667 2.3333 0.6667 2.6667 4.0000 50000 -3.0000 5.0000 1.6667 3.0000 5 0000 0.6667 3.3333 3.6667 4.6667 3.0000 4.3333 1 0000 5.0000 30000 2.0000 3.0000 4.3333 -0.3333 0.6667 1 6667 1 6667 5.6667 1 0000 7 0000 3.3333 -1 0000 1 0000 2.3333 5.6667 5.6667 13333 16667 0.3333 6.3333 30000 -4.3333 4.6567 2 0000 30000 1.6667 0.6667 1 6667 6.0000 6.3333 -70000 6.3333 0.6667 -6.6667 0.6667 1.6667 -2.6667 0.3333 1 0000 30000 76667 -70000 -6.3333 6.3333 8.3333 7.6667 -1.3333 3.0000 0.6667 50000 -7.3333 40000 6.6667 -3.0000 1.3333 10000 4.6667 0.3333 -1.3333 -50000 0.3333 -7.3333 -3.0000 -3.6667 -3.6667 0.6667 2.6667 2.3333 -1.3333 2.6667 0.6667 -3.3333Purchase probabilities of new bank accounts Liberty Bank Respondent ID account profile 2 5 6 7 8 9 10 11 12 13 14 15 2 16 17 18 4 5 6 7 Market share and profit calculation Segment-wise market shares Segments Liberty Bank account profile Overall 2 Margin (%%] Profit market share 28.5 Segment-wise attribute importances Segment 2 3 Minbal 21 Fee 16 ON ATM 33 13.5 21 35 31 Total no. of customers 100,000 Segments 1 Segment size 319% 43% 2695 WE. account balance $900 $1,500 $2,000