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Customer Analytics for New Product Development

Final Exam
______________________________________________________

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!
Nikhil Dwarakanath
Section A
71310012


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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.
Product / Service Chosen Smartphone
Benefits to the customer include (not exhaustive)
Voice Communication
Data Communication
Photo & Video Capture
Movie & Music Device
E-Mail Access
Social Media Integration
Availability and Variety of App EcoSystem
Long Battery Life
(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
Survey For Segmentation of Smartphone Users
1. Brand is the most important thing for me when selecting a Smartphone
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

2. I need E-Mail connectivity all day on my smart device
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

3. I watch a lot of movies on my Smartphone
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

4. I listen to a lot of music on my Smartphone
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

5. I take a lot of pictures / video and a good quality camera is very
important to me when selecting a Smartphone
Strongly 1 2 3 4 5 6 7 Strongly
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Disagree Agree

6. I am a Social media junkie and post a ton of stuff via my mobile
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

7. I download and use a lot of Apps on my Smartphone
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

8. I am a Smartphone junkie and need All-Day battery life
Strongly
Disagree
1 2 3 4 5 6 7 Strongly
Agree

9. My Age ___________________


10. My Gender
M_____ F_____


11. My Annual Income
Rs.________


12. Check One Of The Following. I am
A Professional_______ A Business Man_______ A Student________

Other (Please Mention)___________________


Questions 1 to 8 are basis questions that attempt to identify needs and attributes that
are important to the response group. They attempt to understand the relative importance
of attributes like Brand, E-mail Connectivity, Movie/Music Experience, Camera Quality,
Social media integration, App ecosystem and battery life, which buying a Smartphone.
Questions 9 to 12 are descriptor questions that attempt to identify the underlying
segments based on the demographics of the response group such as Age, Gender, Income
Profile and Occupation.

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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).
I chose the following
attributes, with the following
levels
Price was pre-specified in the
question. The other attributes I
chose were battery life and the
type of smartphone screen,
both with three levels each.

The product bundles were created in MEXL

The respondent ratings were inputted in the template

The Estimated part worth utilities on the basis of the above response ratings is as follows




(2a) Provide graphs to illustrate your utilities for each attribute
(2b) Explain/describe your results (i.e. the partworth utility graphs in above question),
drawing relevant insights for each attribute.

Attributes / Bundles Bundle 1 Bundle 2 Bundle 3 Bundle 4 Bundle 5 Bundle 6 Bundle 7 Bundle 8 Bundle 9
Battery Life 18 Hour 18 Hour 18 Hour 12 Hour 12 Hour 12 Hour 10 Hour 10 Hour 10 Hour
Screen Type LCD LED IPS LCD LED IPS LCD LED IPS
Price Rs. 15000 Rs. 18,000 Rs. 21,000 Rs. 18,000 Rs. 21,000 Rs. 15000 Rs. 21,000 Rs. 15000 Rs. 18,000
Respondents / Ratings Bundle 1 Bundle 2 Bundle 3 Bundle 4 Bundle 5 Bundle 6 Bundle 7 Bundle 8 Bundle 9
Respondent 1 87 84 70 68 65 85 40 79 44
Respondents /
Attributes and Levels
18 Hour 12 Hour 10 Hour LCD LED IPS Rs. 15000 Rs. 18,000 Rs. 21,000
Nikhil 42 29 0 0 18 2 41 11 0
Attributes / Levels Level 1 Level 2 Level 3
Battery Life 18 Hour 12 Hour 10 Hour
Screen Type LCD LED IPS
Price Rs. 15000 Rs. 18,000 Rs. 21,000
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Questions (2a) and (2b) have been answered together
Graph of my part worth utilities for all
attributes relative to the others
I am a value seeking customer who cares
most about battery life and appreciates an
LED display



This has also been broken down for each
attribute
I have a high preference for a long
battery life




I prefer an LED display the most, followed
by an IPS




I seek value in terms of price, but am also
ok to pay for certain features

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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 Point: An Ideal point is the ideal combination of attributes (translated to dimensions)
as seen by a customer or a set of customers.
(3b) What specific steps would you take in Perceptual Mapping analysis to get an Ideal
Point?
To include an Ideal Point in a Perceptual mapping analysis, the concept of an ideal brand is
introduced in the survey questionnaire. The additional Ideal Brand is then sought to be
evaluated by the respondents.
So if every brand is being evaluated on four attributes, lets say, battery life, screen quality,
email connectivity and sturdiness. Then an additional set of questions is introduced asking
the respondent to rate the Ideal Brand in his/her mind on these four attributes.
Steps include
Add an additional brand Ideal Brand that respondents have to rate on all attributes
Ask respondents to evaluate the Ideal brand with desired ratings for attributes

(3c) Define Ideal Vector(or Preference Vector)in 1 sentence:
Ideal Vector: An Ideal Vector indicates the direction in which a respondents preference
increases. The slope of the ideal vector indicates the preferred ratio of the two dimensions
by the respondents. It helps identify attributes that most influence preferences and is hence
also called the preference vector
(3d) What specific steps would you take in Perceptual Mapping analysis to get an Ideal
Vector (or Preference Vector)?
To include an Ideal Vector in a Perceptual mapping analysis, the concept of a preference
attribute is introduced in the survey questionnaire. The additional Preference attribute is
then sought to be evaluated by the respondents for all brands.
So taking the same example, every brand is now evaluated on five attributes, i.e, battery
life, screen quality, email connectivity, sturdiness and the newly introduced Preference
attribute. Then an additional set of question is introduced asking the respondent to rate
each brand in terms of his/her preference of the same.
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For Example,
Please indicate your Preference for Brand B1
Not
Preferred
1 2 3 4 5 6 7 Highly
Preferred

Steps include
Add Preference as an additional attribute for all brands in the questionnaire scope
Ask respondents to indicate their preference for each of the brands

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?
Steps Include
1. Identify Relevant Competitor Products
2. Identify attributes across the product category that are relevant for Purchase behaviour
3. Identify sample of relevant customers (respondents)
4. Conduct a conjoint analysis and estimate market share for each product at present
prices
5. Conduct a second conjoint analysis with the new product (with new feature) and
estimate market shares again. Keep all other attributes for the incumbent and
competition the same.
Assume that the introduction of a new feature keeping everything else constant
resulted in a market share increase.
6. Conduct a third conjoint increasing the price of the newly introduce product, keeping
everything else constant. This will ideally result in a reduction in market share due to
the trade-off respondents make given the increase in price
This process may be iterative to find the price point that results in the market
share falling back to the initial level.
7. The difference between the higher price and the original price will be the incremental
amount the incumbent can charge for the new feature, without losing market share