3 Common Mistakes When Conducting New Product and Pricing Research

October 20th, 2020
Rich Raquet | Chairman, TRC
Hero Image: 3 Common Mistakes When Conducting New Product and Pricing Research

Discrete Choice Conjoint is a powerful tool for among other things conducting product development and pricing research. It is flexible and can handle even the most complex of products. With that said, it requires thoughtful design with an understanding of how design will impact results. Here are three mistakes that often lead to flawed design:

1. Making the exercise too complex

The flexibility of conjoint means you can include large numbers of features and levels. The argument for doing so is a strong one…including everything will ensure the choices being made are as accurate as possible. In reality, however, respondents are consumers and consumers don’t like complexity. Walk down the isle of any store and note that the front of the package doesn’t tell you everything about a product…just the most important things. Retailers know that too much complexity actually lowers sales. Our own research shows that as you add complexity, the importance of the easiest to evaluate feature (normally price) rises…in other words, respondents ignore the wealth of information and focus more on price.

What to do:
Limit the conjoint to the most critical features needed to meet the objectives of the research. If you can’t predict those in advance, then do research to figure it out. A custom Max-Diff to prioritize features or a product like our MTE ™ (which uses Bracket™) will tell you what to include. Other features can be asked about outside the conjoint.

2. Having unbalanced numbers of levels

Some features only have two levels (for example, on a car conjoint we might have a feature for “Cruise Control” that is either present or not present). Others, however have many levels (again on a car conjoint we might offer 15 different color choices). Not only can including too many levels increase complexity (see point 1), but it can actually skew results. If one feature has many more levels than the rest, the importance of that feature will almost certainly be overstated.

What to do:
As with point one, try to limit the levels to those most critical to the research. For example, if you are using conjoint to determine brand value, you don’t need to include 15 colors…five or six will do the job. If you can’t limit things, then at least understand that the importance of the feature is being overstated and consider that as you make decisions.

3. Not focusing on what the respondent sees

Conjoint requires a level of engagement that most questions do not. The respondent has to consider multiple products, each with multiple features and make a reasoned choice. Ultimately they will make choices, but without engagement we can’t be sure those choices represent anything more than random button pushing. Limiting complexity (point 1 again) helps, but it isn’t always enough.

What to do:
Bring out your creative side…make the exercise look attractive. Include graphics (logos for example). If you can make the choice exercise look more like the real world then do so. For example, if the conjoint is about apparel, present the choices on simulated “hang tags”, so consumers see something like they would see in a store. As long as your presentation is not biasing results (for example, making one product look nicer than another) then anything goes.

These are three of the most common design errors, but there are of course many more. I’m tempted to offer a fourth, “Not working with an experienced conjoint firm”, but that of course would be too self-serving!