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An essential requirement for the success of a company is the profound knowledge of its customer’s needs and preferences. Market research is the tool for companies to investigate and analyze these preference structures of customers. Among the many different approaches to market research, the Conjoint Analysis in particular experiences increasing popularity. The results of the Conjoint Analysis provide the basis for a targeted product design and pricing strategy as well as market segmentation.Despite the close relation between market research and empirical research in the tourism sector, there is still only little attention paid to the Conjoint Analysis; although its numerous sub-methods like the ‘Adaptive Conjoint Analysis’ and ‘Graded Pair’ often draw the interest of the end client already because of their distinctive names.
Advantages of the Conjoint Analysis towards traditional surveys
The advantages of the Conjoint Analysis towards other methods of tourism market research are briefly explained with the following, typical research question: “Which factors influenced the tourist in his decision-making process for a particular travel destination?”
In a traditional (compositional) survey the participant would be given a particular number of questions, which he has to rate on a certain scale, such as “How important is the price, safety, distance, etc. for you” or “Is it important for you to impress friends and colleagues with your trip?”. In a traditional survey such questions would very likely evoke answers that are socially desired and thereby distort the research results. Depending on the research subject, this risk can be quite high.
The Conjoint Analysis however reduces the risk of distorted results due to socially desired answers through its holistic stimulus assessment. Holistic in this case means that the participant has to judge all aspects of a trip at the same time. He is not asked one particular question, for example about the price of a trip, but is confronted with an overall package of a trip and has to weigh the different factors against each other to come to a conclusion (example: “How do you evaluate a trip to this destination at this price with this airline as a whole?”). While in a traditional survey the participant might be embarrassed to admit how important the price is to him – in fear of being judged a ‘poor fellow’ or a ‘penny pincher’ – the holistic Conjoint Analysis disguises the assessment of these individual factors with the whole package of trip characteristics. The exemplary question shows that the price is not rated individually but ranks equally with the other aspects ‘destination’ and ‘airline’. Therefore, the participant is not at any point urged to deal explicitly with the factor ‘price’, but decides himself which of the factors he pays most attention to.
Illustration of complex cognitive processes
The second and decisive advantage of the Conjoint Analysis is its potential to illustrate complex, cognitive processes. When, for example, a participant or a tourist is asked afterwards why he chose a certain trip – scientifically spoken examining the ‘external validity’- then the result is often a ‘somehow non-transparent mixture of all factors’ and the answer is ‘an intuitive decision’. Only very few people apply a particular list of factors in their decision-making-process and add up the points in the end to come to a rational decision, but it is most often a holistic process of weighing the pros and cons of the overall package. The decision for a certain trip is therefore most often made ‘irrationally and intuitively’. Afterwards it is difficult for the tourist to explain and rationalize these complex cognitive processes – and nearly impossible for the researcher to do the same on an accumulated level.
Uncovering irrational gut decisions
The strength of the Conjoint Analysis is to come close to illustrating these complex cognitive processes and ‘irrational gut decisions’ by confronting the participant with several versions of a question. With this a certain pattern in the participant’s decision-making becomes obvious. The participant is not only confronted with one particular trip, but with a variety of trip scenarios. The first question could be “How do you rate trip A to destination B at the price C on a scale from 1 – 10?” while the second question could be “How do you rate trip X to destination Y at the price Z on a scale from 1 – 10?”. The three factors ‘trip’, ‘destination’ and ‘price’ stay the same, only their values change. If the participant is confronted with a sufficient number of scenarios it unveils the so-called irrational, individual decisions and displays a typical decision pattern, both for the individual participant as well as for all participants together on an accumulated level.
Read more about other research methods in tourism: e.g. mystery checks.