Finding the optimal product design with conjunct analysis
A product is shaped by many features. For example, hair dryers come in different shapes and colors, with various attachments, possible heat settings and motor types. Each of these features affects a customer's decision whether to buy the product or not.
The composition of features into a product is called product design. Introducing new products costs a lot of money. Failure is not an option, optimal design is crucial to avoid that. Even for existing products, innovation is important and a lot of profit can be made in adjusting a few features.
Customized optimizations of product designs
To determine whether customers would buy a specific product, conjunct analysis is an appropriate method. Respondents are shown a set of products and choose the one with their preference. We repeat this until we know to what degree customers value each feature. The goal is then to choose the features and pricing so that profits, market share or both are maximized.
In a market with two simple products, this can often be done manually. However, once a company offers multiple and more complex products in a large market, more sophisticated methods are a must. In the hair dryer example, we are dealing with 40 SKUs, all unique on a combination of 14 characteristics.
Standard optimizers fall short for this type of problem, which is why at Blauw we apply methods suitable for product design optimization. Applying the nested partition approach has proven to work well. In short, this involves a step-by-step search for promising options using random sampling and the use of smart algorithms such as greedy search and hill climbing to find the optimum within the parts (partitions).
Featured
expertise(s)
Product Development
Keep innovating! Product Development research gives you the necessary input from creation to successful launch.
Wondering if we can do something for you ?
