Conjoint Analysis Drives Sales & Development for Leading Durable Goods Manufacturer

CHALLENGE

Recognizing that the market is both crowded and maturing, Lifetime Products, a global consumer durable goods manufacturer, was looking for a better way to inform its product development process. One specific challenge included creating an optimal outdoor storage shed, all while battling escalating management information demands.

“We needed a solution to accommodate the large attribute/level designs necessary to study our product line effectively. We found that solution, and more, in Sawtooth Software’s Adaptive Choice-Based Conjoint (ACBC).” – Bob Goodwin, MR Director, Lifetime Products

SOLUTION

ACBC is an innovative, quantitative survey approach, first developed by Sawtooth Software. It leverages the best aspects of Choice-Based Conjoint (CBC), all while creating a customized, interactive and engaging experience for its respondents. ACBC has proven increasingly useful when the list of product attributes is greater than six. This is because ACBC learns which attributes and levels the respondent is focusing on and adapts the design to show only product concepts that are similar to each individual’s ideal product. The result is a user-centered survey that more closely mimics real-world decision making. In this study, a total of 16 attributes and 45 levels described the shed, making ACBC the ideal solution.

To start, respondents are asked to configure their preferred outdoor storage shed in a Build-Your-Own type question. Depending on their answer, different outdoor storage shed concepts are created that are of interest to the respondent. The respondent is then asked which concepts are “a possibility.” Must-have and unacceptable features are identified in this screening section which capture non-compensatory decision behaviors, like brand loyalty or product requirements, and the concepts shown adapt based on each individual’s rules. Any products considered “possibilities” and conforming to these rules are brought into a final choice tournament where respondents choose the product concept they are most likely to purchase. At the end, a winning product is identified for each respondent.

Other features unique to this study include: Prior to the ACBC exercise, respondents identified the top 10 most important features and the top 4 brands that would impact their decision to purchase an outdoor storage shed. By using this constructed-list approach, the number of attributes in the ACBC exercise reduced from 16 to 10, and brand names from 8 to 4, for each respondent. Now, respondents could focus most on the features that would drive their personal selection process.

A customized price approach generated more realistic product concepts – where the total price of the product is based on the incremental costs of the attribute levels included in that concept (i.e. a 7’x7’, wooden shed costs more than a 5’x5’, plastic/resin shed).

The conditional display feature revealed images of the different outdoor storage shed configurations, based on the specific attribute and level combinations. This made the exercise more realistic and easier to comprehend.

OUTCOME

By utilizing Sawtooth Software’s ACBC program, Lifetime Products determined which outdoor storage shed to manufacture to garner the most market share. Lifetime Products also built a market simulator within Sawtooth Software, allowing the team to configure different storage shed offerings and simulate how they would perform in the market (otherwise known as “what-if” analysis). The results of these simulations helped the team understand the impact of a potential product design change on share as well as gauge potential competitor responses to proposed product designs. When we force respondents to make difficult trade-offs between product offerings, we learn what they truly value.

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