Abstract
Over the past decade or so, conjoint analysis (Green and Rao 1971; Johnson 1974) appears to have become one of industry's most widely applied marketing research techniques for estimating consumer's multi-attribute utility functions (Cattin and Wittink 1982). However, a continuing problem in application of conjoint analysis is how to handle the price attribute in the construction of stimulus profiles for presentation to respondents. In many cases of practical interest, the price level will be highly correlated with other product attribute levels. If the researcher ignores this correlation by allowing the price levels to vary independently of other attributes, the resulting profiles may appear sufficiently unrealistic to result in respondents' discounting each profile's attractiveness, thus reducing the validity of the results. A related problem which adds to the complexity of new product pricing research is the bundling issue. In the context of conjoint analysis, the question is whether one can predict a respondent's evaluation of a bundle of product attributes and price as a simple linear function of the summed part worths of the entities making up the bundle when each entity is presented with its actual price. Metric hybrid conjoint models have received a fair amount of industry application to date. The purpose of these models is to reduce data collection time while still retaining individual differences in part-worth functions. The present paper extends this class of models to include categorical conjoint analysis in which the criterion variable is classificatory. This model is applied to an extremely large conjoint problem involving over 40 attributes and over 100 attribute levels. The study results support the viability of the model for dealing with extremely large conjoint problems. The study also shows evidence of the inability of simple functions of self-explicated utilities for components of a bundle of hotel amenities to predict respondents' preferences for the total bundle. (Journal of Business, 1984, vol. 57, no. 1, pt. 2) ? 1984 by The University of Chicago. All rights reserved. 0021-9398/84/5712-0019$0 1.50
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