A better understanding of customer choice
Client: A major pharmaceutical company
Time: May 2012
The client was developing a new drug for birth control with which he intended to gain shares of the existing market for birth control drugs. To help make the right kind of decisions, the client wanted to gain a clearer understanding of such issues as
– What are the options currently available for birth control?
– What share of the market do they have?
– What is the expected future usage for different product profile scenarios? Product profiles in this case mean combinations of various drug specifications for birth control.
We conducted an online survey among obstetricians and gynecologists – practitioners (MDs) who treat parous (women who have given birth to at least one child) and non-parous (women who have never given birth to a child) women.
Our questionnaire aimed to gather the following information:
– details on the extent to which existing treatment options are being prescribed,
– presenting the new drug profile,
– future allocation in which the new drug will be prescribed alongside with existing treatment options
– possible choices based on the conjoint exercise module
In this study each MD was shown 20 hypothetical scenarios. Each scenario presented three different complete products each of which displayed different key product attributes in terms of levels of drug efficacy, drug safety, and drug risks and possible side effects. The MD was asked to choose the most preferred combination for each patient type.
The philosophy behind the conjoint technique
The name ‘conjoint analysis’ implies the study of joint effects. In the case of marketing applications, we study multiple product attributes and evaluate their joint effects on the customer side. This type of analysis is used to measure consumer preferences of multi-feature product alternatives.
A conjoint analysis assumes that when a consumer makes a decision to purchase a product, this decision is based on trade-offs among various product characteristics. In other words, it’s likely that one single product will not satisfy the consumer in every way at a certain price, so the consumer has to decide which features they need or want the most and which they are prepared to trade-off.
Analysis of conjoint data yields a series of scores for each respondent at each attribute level. These scores, known as ‘part-worths’, are a measurement of the ‘utility’ that the consumer associates with a product and its attributes. Each score reflects the value that a respondent associates with each attribute level. Thus we are able to build a product and then calculate the value the consumer finds in that product. By comparing this outcome with other products on the market, we are able to gain a more precise understanding of how consumers actually decide which product to choose.
The study enabled the client to:
– understand the relative importance of each product attributes for each patient type.
– configure a formulation for the new drug for birth control.
– predict the potential share for the client’s product given the current competition.
– it gives an estimate of how many customers might switch from competition to the new drug.