This document discusses how conjoint analysis can be used in the innovation process. It provides an overview of conjoint analysis and how it can help answer questions about feature priorities, pricing, and market share predictions. The document then discusses a case study where conjoint analysis was used by Aperion Audio to understand what factors drive consumer decisions for speakers and what value they place on certain features. The results provided guidance to direct R&D efforts and product positioning.

1. How to Use Conjoint Analysis in the Innovation Process “ If you can’t describe what you’re doing as a process, you don’t know what you’re doing.“ - W. Edwards Deming – Father of Quality Movement

5. TV’s on Bestbuy.com Customers must always make feature/price tradeoffs… How important is… Refresh rate? Resolution? Picture-in-Picture? … to the purchase decision? To the price?

6. A Short Intro to Innovation Processes

7. Questions through the Innovation Life Cycle www.planninginnovations.com Capturing Ideas and Opportunities? Customer Problems? Trends of Interest? Feature priorities? Value questions? Market size? Pricing? Take rate? Usability? Readiness? Messages? Marketing and Sales Programs? Research techniques must reflect innovation stage

8. Two Major Stages at the Front End of Innovation www.planninginnovations.com Discovery (Divergence) Validation (Convergence)

9. More Specifically… www.planninginnovations.com Divergent Methods - Customer Problems? Trends? - New opportunities! Goal? A wide range of potential, valuable opportunities that can drive your strategic and development activities Divergence Methods Convergence Methods Convergence Methods - Evaluation, numbers, priorities - Validated opportunities Goal? A quantified opportunity leading to a valid business case to fund, kill, or shelf

14. Conjoint Design www.planninginnovations.com Consistent Attribute Proving a consistent visual display of attributes and levels helps the user stay refreshed of their options. Options trade-off The core of the study is having respondents decide on a preference to a specific bundle of features at a specific price.

16. Sample Learning www.planninginnovations.com Power is critical to the decision! Almost one-fourth of the decision is based on the power rating – requires further investigation. How are consumers thinking about ‘Power’? Is this a proxy for sound quality? Frequency was relatively unimportant! Even with a wide frequency range, it was still only 5% of the consumer’s decision. Why is that? In this price range, there was less emphasis on price than expected. Certainly an area that Aperion will want to learn more about. E.g. Are they underpricing?

18. How Do You Develop a Conjoint Study?