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SS Summer 2004


Sawtooth Software Conference 2004 Program Set

We are pleased to announce the program for the 2004 Sawtooth Software Conference, to be held in San Diego, CA, October 6-8, 2004.

Our conferences are well-known for their practical focus, friendly environment, accessible presentations, and excellent food. They are not sales events for our software, but forums for discussing a variety of issues related to conjoint/choice analysis, computer/web interviewing, and other quantitative methods. Typically about one-quarter of the attendees are not Sawtooth Software users.

To register for the conference, or to view more details (including abstracts), please visit www.sawtoothsoftware.com. The conference registration is only $750 for the 2.5-day event ($900 after August 16).

Preliminary Program Outline:

Wednesday, Oct 6, 2004

Data Collection Issues

  • It’s Ethical Jim, But Not in the Way We Used to Know It! – Ray Poynter, UK
  • A Structured Approach to Choosing and Using Web Samples – Theo Downes-LeGuin, Doxus
Components-Based Pricing Research

  • Optimizing the Online Environment: Examination of a Configurator Analysis Case Study – Donna Wydra, Socratic Technologies, Inc.
  • The Options Pricing Model: An Application of Best-Worst Conjoint Analysis to Multi-Item Pricing – Keith Chrzan, Ming Shan, Maritz Research
Conjoint Analysis

  • Conjoint Analysis: How We Got Here and Where We Are—An Update – Joel Huber, Duke University
  • The “Importance” Question in ACA: Can it Be Omitted? – Chris King, Aaron Hill, Sawtooth Software
Derived Measures of Preference/Importance
  • Scale Development with MaxDiffs: Two Case Studies – Luis Sa Lucas, IDS – Interactive Data Systems
  • Multi-Colinearity in CSAT Studies – Jane Tang and Jay Weiner, Ipsos-Insight
Thursday, Oct 7, 2004

Conjoint Analysis Case Studies

  • Insights into Patient Treatment Preferences Using ACA – Liana Fraenkel, Yale School of Medicine, Dick Wittink, Yale School of Management
  • Modeling Conceptually Complex Services: The Application of Discrete Choice Conjoint, Latent Class, Hierarchical Bayes, and Advanced Simulation Analyses to Medical School Curriculum Redesign – Charles E. Cunningham, Ken Deal, Alan Neville, Heather Miller, McMaster University
Applied Choice Models

  • Over-Estimation in Market Simulations: An Explanation and Solution to the Problem with Particular Reference to the Pharmaceutical Industry – Adrian Vickers, Phil Mellor and Roger Brice, Adelphi International Research, UK
  • Estimating Preferences for Product Bundles vs. a la carte Choices – David Bakken, Megan Kaiser Bond, Harris Interactive
Discrete Choice Design

  • The Importance of Shelf Presentation in Choice Based Conjoint Studies – Greg Rogers, Procter and Gamble, Tim Renken, Coulter/Renken
  • The Effect of Design Decisions on Business Decision-Making – Curtis Frazier, Urszula Jones, Millward Brown-IntelliQuest
Quantitative Approaches with Soft Attributes

  • Application of Latent Class Models to Food Product Development: A Case Study – Richard Popper, Jeff Kroll, Peryam & Kroll Research Corporation, and Jay Magidson, Statistical Innovations
  • Assessing the Impact of Emotional Connections – Paul Curran, Greg Heist, Wai-Kwan Li, Camille Nicita, and Bill Thomas, Gongos and Associates, Inc.
Friday, Oct 8, 2004

MCMC Methods

  • Item Response Theory (IRT) Models: Basics, and Marketing Applications – Lynd Bacon, Jean Durall, LBA Ltd., and Peter Lenk, University of Michigan
  • Avoiding IIA Meltdown: Choice Modeling with Many Alternatives – Greg Allenby, Ohio State University
Advanced Topics in Choice Modeling

  • Managing Missing Data in Predictive Choice Models – Marco Vriens, Microsoft, Inc., Steve Cohen, SHC
  • A Second Test of Adaptive Choice-Based Conjoint Analysis (The Surprising Robustness of Standard CBC Designs) – Rich Johnson, Sawtooth Software, Joel Huber, Duke University, and Bryan Orme, Sawtooth Software
Optional Half-Day Tutorials (Tuesday, Oct 5, 2004)

These four-hour tutorials provide an opportunity for more in-depth training. The cost is $195 for one tutorial, or $320 for two tutorials (until August 16).

Morning:

  • Introduction to Web Interviewing Using SSI Web – Chris King and Justin Luster, Sawtooth Software
  • Hierarchical Bayes: Theory and Practice – Peter Lenk, University of Michigan, and Bryan Orme, Sawtooth Software
Afternoon:

  • New Features for Advanced CiW Questionnaires (SSI Web v5) – Chris King and Justin Luster, Sawtooth Software
  • Introduction to CBC – Tom Pilon, TomPilon.com
  • Applications in Segmentation Modeling Using Latent GOLD, GOLDMineR, SI-CHAID, and Latent GOLD Choice – Jay Magidson, Statistical Innovations Inc. and Tony Babinec, AB Analytics
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Workshop for Newcomers to Conjoint Analysis

We often hear from people very new to conjoint analysis who want to receive instruction and training. An excellent opportunity is the 1.5-day introductory class on conjoint analysis held just prior to our regular research conference in San Diego, CA, on October 4-5 (Monday and Tuesday). Tom Pilon, Ph.D. will be conducting the sessions. Tom has extensive experience in applying conjoint methods to business problems.

Tom will introduce the three main methods of conjoint analysis, including traditional full-profile conjoint, Adaptive Conjoint Analysis (ACA) and Choice-Based Conjoint (CBC).

The cost is $700. To register for this event, please visit www.sawtoothsoftware.com and click the Education + Conference link.

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Update on Relative Conjoint Analysis Usage

In April, 2004 we completed a second wave of our annual customer feedback survey. For those who participated, thank you! Aside from asking users how we might improve, we also collected some information that may be of interest to you.

Customers specified what percent of projects over the last 12 months employed which specific conjoint methods.


The results (Exhibit 1) show that the momentum continues to shift (from 2003 to 2004) in favor of CBC (Choice-Based Conjoint). Considering only the projects that used CBC, ACA or CVA, the relative use of CBC increased from 50% to 61%. (Data are weighted by the number of projects completed.)

In the 1990s, ACA was the most widely used conjoint method (according to two industry surveys). Although we cannot be certain exactly when, in about the year 2000 CBC began to be used more often than ACA. One of the main reasons for this shift was the availability of HB methods (starting in the late 1990s) to estimate individual-level part worths from CBC data. Previously, only group-level estimation was available.


Users often test multiple methods to estimate part worth models, often selecting the one that best meets some criterion, such as predictive accuracy. Exhibit 2 shows that 62% of CBC users are using HB for their final models. Using HB to analyze CBC data importantly leads to individual-level part worth estimates.

ACA (Adaptive Conjoint Analysis) and CVA (Traditional Full-Profile Conjoint Analysis) have always supported individual-level estimation. Still, HB estimation can improve estimates for ACA and CVA beyond the classical OLS approaches. The use of HB in these more traditional contexts is growing, with 33% of ACA users and 25% of CVA users now relying on HB estimation.

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SSL (Secure Socket Layer) Available with Sawtooth Software Hosting Services

Many of our SSI Web users have been taking advantage of our web survey hosting services. Even though our software enables users to host their own projects on either Windows or Unix servers, some users find it more convenient to ask us to host surveys for them. Our basic hosting package for a small project starts at $250.

Recently, we have added SSL (Secure Socket Layer) as a security option in our hosting packages (base price starts at $500 for SSL). SSL encryption protects your data as it is transmitted across the internet and may give your respondents an added measure of confidence and trust. When respondents view your survey, the "Secure Connection" icon appears in their browser window. If you would like more information about our hosting services, please contact Aaron Hill, at 360/681-2300. We may also be able to give you suggestions if you want to implement SSL within your own survey hosting environment.

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Testing for Significant Differences in Conjoint Analysis

When analyzing conjoint analysis data, we may wish to conduct statistical tests to detect significant differences. Common situations include:

  1. Testing whether the share of preference for one product is significantly different from another, or if shares differ by respondent segments.
  2. Testing whether one attribute is more important than another, or a level has a higher utility than another (within the same attribute).
Performing statistical testing as described in this article requires individual-level part worth utilities.

Tests between Two Products

  1. Generate an Individual Shares file by checking Individual Results to File from the Scenario Specification dialog in the Market Simulator. This generates a file of product shares for each respondent called studyname.shr.
  2. Using the individual-level results (perhaps you open this file using Excel or your statistical package), compute a difference in a new column (variable) between the two products (Share1 – Share2).
  3. For this new variable representing the difference, calculate a mean and a standard error across all respondents. (The standard error is equal to the standard deviation divided by the square root of the sample size.)
  4. Compute a t statistic by dividing the mean difference by the standard error of the differences. A t-value of absolute magnitude greater than 1.96 indicates a significant difference at the 95% confidence level.
Differences between Two Segments for the Same Product

When running market simulations using individual-level utilities, a share and standard error are reported for each product in the simulation scenario. To test for a significant difference between a product’s share for two unique respondent groups (such as males vs. females), we first compute a t-statistic:


Where the subscripts 1 and 2 refer to the respondent groups 1 and 2, and SE refers to the standard error of the shares, as reported in the market simulator.

A t-value of absolute magnitude greater than 1.96 indicates a significant difference at the 95% confidence level.

Testing Differences for Importances/Part Worth Utilities

  1. Export the Importance scores or normalized utilities (by the Points, Diffs, or Zero-Centered Diffs method) to a comma-separated values (.CSV) file using the Run Manager + Export option.
  2. Open the file in Excel (or a statistical software package). Create a new column (variable), where the new variable is equal to the difference between the importance scores or utility values of interest. If comparing part worth utilities, remember that you should only compare levels within the same attribute.
  3. Compute a t-statistic by dividing the mean difference by the standard error of the differences. A t-value of absolute magnitude greater than 1.96 indicates a significant difference at the 95% confidence level.
A Discussion of Standard Error

In conjoint analysis, the standard errors reflect the uncertainty in the preference estimates due to sampling and the uncertainty regarding the estimated part worths. They do not completely characterize the accuracy of the model. There are other sources of inaccuracy such as bias or misspecification that are not captured in the standard error.

Standard errors decrease as the sample sizes increases. Quadrupling the sample size cuts the standard error in half.

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User Experiences: Using SSI Web CAPI Module to Gain the Advantages of Online Interviewing Offline

Editorial Note: Sawtooth Software has an ongoing, open invitation for users to submit stories regarding innovative ways they are using our tools. The following represents one such story, submitted by Cory Schwartz, President of ConsumerQuest.

The Situation

A leading developer and marketer of innovative, technology-based educational software was considering 60 new titles for a limited number of openings in its 2005 product line. A screening test was needed among 300 mothers of target-age children. Using SSI Web 3.5’s CAPI research module, ConsumerQuest quantitatively assessed the relative appeal of the 60 new product candidates. The most appealing titles were identified and the combination of titles that reached the most moms was discovered. The study also provided insight into what moms liked about the titles they’d most like to buy and what they disliked about those they’d least like to buy.

Methodological Challenge

Our client’s business – technology-based educational software – is in an extremely competitive category where premium value is placed on design innovation and ideas. The need to determine consumer preferences for new products had to be weighed against security concerns. Exposing consumers online to the new concepts was a risky proposition because of a lack of control over who saw the concepts and over the a bility to prevent new ideas from being captured in screen shots and circulated over the Internet. Traditional central location testing via pre-recruit was desirable because 1) respondents could be screened for security from research facility databases, 2) the research could be conducted in less sensitive markets where the client’s direct competitors did not exist, and 3) respondents could be monitored so they could not “capture” the images of the new products.

On the other hand, central location testing via pre-recruit interviewing posed other limitations. First, each mother had to be exposed to a pre-determined, select number of new concepts according to a randomized rotation based on her child’s age. Results were needed within ten days of when electronic versions the concepts were available, necessitating the need for interviewing small groups of moms simultaneously, which in turn would mean printing and controlling several hundred color concepts. The need for rapid turnaround also posed challenges on the back end in terms of a lengthy keypunch process and the need to de-rotate the data file.

Why We Chose To Use SSI Web’s CAPI Module

Fortunately, SSI Web 3.5’s CAPI module offered a solution that met all of our needs. First, our staff is well acquainted with the software, having used it to program and conduct a plethora of studies online. Custom JavaScript routines could easily be incorporated, such as one that instructed moms with more than one child to focus on a particular child by name of randomly selected age. The software also provided the flexibility to have respondents read questions while simultaneously seeing the concept on screen. Thus, respondents did not have to scroll back and forth, up and down, between concept and questions: The respondent could contemplate the question while simultaneously seeing the concept. SSI Web allowed the order of exposure to the concepts to be randomly rotated. After seeing and evaluating 25 of the 60 concepts, each mom was asked to build a library by selecting her first, second, and third choices for her child from among the 25 concepts. Each mom also had to see all 25 concepts at once via thumbnail-sized images. Happily, we found that SSI Web could allow moms the option of clicking on any thumbnail to see the concept again in its full-sized form. Writing field instructions for installing the CAPI module and activating our survey on a local server (without any access to the Internet) was straightforward.

Outcome

We were able to complete interviewing over a three-day weekend. And since the data was already “keypunched and de-rotated” by SSI Web, we generated data tabulations and a subsequent TURF (total unduplicated reach and frequency) analysis the following week. The technology-based educational software company successfully identified the most appealing titles and the combination of titles that would attract the most moms to its product line.

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User Experiences: How to Marry People, Prototypes, and Adaptive Conjoint

Editorial Note: Sawtooth Software has an ongoing, open invitation for users to submit stories regarding innovative ways they are using our tools. The following represents one such story, submitted by Thomas Klobucar, Director of Research, Vernon Research Group.

People. Market research would be considerably easier if people were not required to make it work—particularly when testing prototypes with dozens of new characteristics and clients waiting to make critical design and pricing decisions based on the results of consumer testing.

Faced with the problem of designing a study to gather quantitative data from a large sample of respondents for such a test, we mulled over a variety of methods for gathering such data.

One of the most difficult issues we faced, and often face when designing studies for manufacturers of durable goods is in finding a method that allows us to show the actual item to respondents before asking them to express their opinions about the items they have seen. Traditional focus groups of eight to ten people are fine for gathering ideas, but their inherently eclectic and unscientific nature cannot yield the utility and pricing data manufacturers crave. No one wants to base business decisions about entire model lines on focus group outcomes.

Another method under consideration was to use the internet to graphically display the object at hand and then use sophisticated interviewing techniques allowed by Sawtooth Software’s SSI Web ACA Module that are only possible using a computer. The problem, of course, with conventional internet interviewing is that respondents cannot see the actual item being tested. For this recent project, which called for the nuanced understanding only possible using computer-assisted interviewing while exposing participants to the actual prototypes, we hit on a design that incorporated broadly-recruited Voice of the Consumer panels of 30 participants each in a number of cities across the country and combined that design with computer assisted interviewing CAI on the internet

Only the largest market research firms may own sufficient computer resources to maintain a squadron of laptop computers for CAI. Even for those that do own laptops in those numbers, the cost of maintaining each with the software necessary to conduct 30 simultaneous interviews may be prohibitive. Since we needed to conduct a computer-dependent survey design (using Sawtooth Software’s ACA), our solution was to rent laptop computers and arrange for high-speed internet access at each of our interviewing facilities—because the prototypes we needed to demonstrate were so large, our interviews ended up being conducted in hotel ballrooms and convention centers. The interviews were conducted in a single room and the interviews were conducted via the internet, at the moderator’s direction.

The outcome of this project was extraordinary. Not only were we able to gather the information you can only get through ACA, we were also able to capture responses to “normal” survey questions using the same SSI Web interview, all without having to fiddle with a single interview computer beyond setting the browser’s homepage to the study URL. The data were ready for download when we returned to the office the next day without having to enter a single response manually. We had our data, and analysis could begin immediately.

The results? Using Peter Williams’ suggestions for including holdout tasks in the study* to ensure pricing data were correctly estimated (and weighting the data accordingly), we were able to duplicate quite precisely the current market and build a series of models that showed what consumers wanted and how much they were willing to pay for those options. The non-ACA data we also captured using SSI Web integrated well, allowing us to look at market segments very closely and determine the attributes that appealed most to different populations.

Sawtooth Software’s SSI Web and ACA module and a little creative logistics management allowed us to build a research model that got the people, the products, and the computers in the same place at the same time without major headaches. We were left with a high degree of confidence in the answers we gave to our clients, who in turn walked away secure in the knowledge that we had gotten things right.

*Williams, Peter (2000). Calibrating Price in ACA: The ACA Price Effect and How to Manage It. Available in Technical Papers Library at: sawtoothsoftware.com

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CPM Perceptual Mapping Software Upgrade Coming

Perceptual maps help managers understand how products are perceived with respect to their strengths, weaknesses, and similarities relative to one another. By way of a two-dimensional picture, perceptual maps can summarize a great deal of information about brands and attributes. This time-proven tool helps managers picture and develop effective strategies for product positioning.

Sawtooth Software first offered perceptual mapping in the 1980s with the APM (Adaptive Perceptual Mapping) System. APM used multiple discriminant analysis, and had the additional benefit that respondents could rate a subset of the brands (e.g. familiar brands) on a subset of the attributes (e.g. most important attributes). We released a new perceptual mapping product in the 1990s that in addition to the standard discriminant-based maps could produce “composite” maps that leveraged both perceptual and preference information. The preference information could directly come from either paired comparisons of brands/products or from conjoint part worths.

With preference information in place, the composite mapping technique creates a mapping space that discriminates among the products in terms of perceptions and preferences. Therefore, an attribute that discriminates strongly among brands in terms of perceptions but is not a driver of preference will have little effect on the map. This makes mapping more actionable, as the dimensions are better tied to preferences rather than just perceptions. Areas of the map representing greater demand can be shaded with darker colors (called a density of demand display), giving managers a better idea of desirable directions for repositioning.


An upgrade for CPM (Composite Product Mapping) will soon be available. This new system is a fully Windows-based program that offers more plotting options, much better graphics rendering (see the graphic on this page as an example) and better data handling capabilities than the previous version of CPM. The attribute vectors are much cleaner (sharper) than before, including the ability to place arrow-heads at the ends of the vectors. The density of demand contours have greater resolution, and there are more options for formatting the individual elements of the maps.

Data for CPM can come from just about any source, whether self-administered computer-based interviewing, CATI, or paper-and-pencil. CPM can read data from standard text-only, delimited formats.

CPM v2 is based on Microsoft’s .NET platform, which requires the .NET framework. This may already exist on your system. If it does not, you can download it for free from Microsoft’s site.

The software is undergoing beta testing, so it is being put through its paces by existing APM and CPM users. The response so far has been positive. If you have any questions regarding this new upgrade, please call us at 360/681-2300. If you have fundamental questions about CPM or the methodology, please download the CPM Technical Paper from our Technical Papers library at sawtoothsoftware.com.

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