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Customer Analytics for New Product Development

Final Exam
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Instructions:
This exam is an open book, open notes exam. However, you are expected to
complete the exam on your own, without help from classmates or others.

Please type your answers in this document. After completion, submit this document
to LMS.

There are 8 pages in the Exam Booklet.

You have two hours for the exam.

The total points for this exam is 100, and this exam is worth 30% of your final grade.

All the best!

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Question 1 (30 points)
Focus on any product or service.
(1a) Describe the product or service in terms of benefits to the customer.
The product/service in terms of benefits to the customer can be done by capturing the
VOC. In this example the product is a Smart Phone. The benefits to the customer captured
through a VOC are:
a. Size should be optimal to be held in one hand
b. Light Weight
c. Good Camera resolution
d. Good Battery Life
e. Fast Processor for Gaming
f. Large Screen size for video/photo viewing
(1b) You are asked to conduct a segmentation study for this product or service. Construct
a survey (questionnaire) with 10-12 questions, clearly specifying what the basis and
descriptor questions are. No open-ended questions are allowed; all questions must be
given in a form so that when data are collected, tools like Cluster Analysis can be used.
Please do not use questions seen in your assignments or from MeXL
Basis Variables Questions (Please rate each of the questions/statements importance on a
scale of 0 to 10, where 0 is least important and 10 is very important)
1. The smart phone size should be as such to fit in one hand
2. The weight of the smart phone should be lighter than the existing model (model
name)
3. The camera should have a resolution greater than 16 mega pixel
4. The talk time battery should last more than 6 hours
5. The processing speed should be fast for gaming and multimedia
6. The screen size should be atleast 4 inches or more
Descriptor Variables Questions:
7. Your age is:
8. Your technology understanding on a scale of 1 to 10, where 1 is poor and 10 is
extremely tech savvy
9. Your occupation is (tick one that applies): Student, Engineer, Home Maker, IT
professional, Management Professional, Entrepreneur
10. Your Gender: Male, Female, Other
11. Your Income per month is (tick one that applies): No Income, $500 to 2000, $2001
to $5000, Over $5000
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Question (2): 30 points
Design a Conjoint Study, with 3 attributes, with Price being one of the attributes. List 2-
3 levels for each attribute. Use MeXL to create bundles for data collection. Act as a
respondent in this Conjoint Analysis, and estimate your partworth utilities. (Hint: you
have done this in your Kirin Beer assignment).

(2a) Provide graphs to illustrate your utilities for each attribute








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(2b) Explain/describe your results (i.e. the partworth utility graphs in above question),
drawing relevant insights for each attribute.
Price of 1000, Speed Super Fast have the highest impact on the utility of the product.
1000 has a partworth value 39 and Super Fast has a value of 51.
The speed Super Fast is seen as the attribute that has the highest impact on the overall
utility of the product/service
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Question (3): 25 points
The following questions deal with Ideal Points and Ideal Vectors (or preference
vectors) in a perceptual map.

(3a) Define Ideal Point in 1 sentence:
Ideal Points capture an optimal level (nor more nor less) of an attribute and these points
reflect the ideal combinations of dimensions as seen by the customer or a segment.


(3b) What specific steps would you take in Perceptual Mapping analysis to get an Ideal
Point?
Ideal point is identified as an ideal brand. This ideal brand is then evaluated on all
attributes as the rest of the competing brands. There are 2 broad steps that we need to
follow in Perceptual Mapping Analysis to get an ideal point:
Combine attribute ratings of ideal brand with other brands
Compare how brands differ from the ideal brand
The following are the specific steps we would need to take in Perceptual Mapping analysis
to get an Ideal Point:
1. Add ideal brand to the other brands
2. Collect data on the attributes for the ideal brand and other brands
3. Generate the perceptual map using the data collected
4. Look for areas of high density of ideal points on a perceptual map
5. Place both the ideal points and the competitor products on the same map
6. Areas where there is a cluster of ideal points indicates a market segment
7. Areas without ideal points are sometimes referred to as demand voids







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(3c) Define Ideal Vector(or Preference Vector)in 1 sentence:

The ideal vector is also called as the preference vector and used to indicate the customer
preferences .


(3d) What specific steps would you take in Perceptual Mapping analysis to get an Ideal
Vector (or Preference Vector)?
Ideal Vector is also called the preference vector. This preference vector is then evaluated
on all attributes as the rest of the competing brands. There are 2 broad steps that we
need to follow in Perceptual Mapping Analysis to get an ideal point:
Analyze the preference as if its another attribute
Identify attributes that most influence preferences
The following are the specific steps we would need to take in Perceptual Mapping analysis
to get an Ideal Vector:
1. Collect data on the attributes for the ideal brand and other brands
2. Generate the perceptual map using the data collected
3. Generate preference vector by averaging scores across the attributes and across
customers
4. Place both the ideal points and the competitor products on the same map
5. The attributes that are closest to the 2 dimensions indicate the ideal preference
vectors
6. The slope of the ideal vector indicates the preferred ratio of the two dimensions by
those consumers within that segment.
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Question (4): 15 points
Explain a step-by-step process as to how you would use Conjoint Analysis to estimate the
incremental price to be charged for a product with a new feature, such that its market share
remains constant. In other words, how much more can you charge for a product with a new
feature so that the market share before the addition of the new feature, and after the
addition of the new feature stays constant?
1. Create all unique bundles with the given attributes
2. Request customers to rank the bundles
3. Each combination will have a preference value
4. Calculate the preference value and the utility value for each of the attribute in this
case Price and the new product feature Calculate Partworths
5. Run the conjoint analysis for market share simulations for existing product profiles.
6. Create analysis template with the existing product profile
7. Run the conjoint analysis to estimate the partworth utilities including the new
feature.
8. Run the conjoint analysis for market share simulations with new product profiles
while optimizing revenue.