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Conjoint analysis for international markets

International conjoint analysis projects As an advanced market research technique, conjoint analysis is most commonly used by larger businesses and for multinationals operating across several countries where it is important that product design and business strategies reflect both global and local needs.

In contrast to traditional scale-based rating approaches, conjoint analysis and techniques like MaxDiff are less affected cultural differences in the way people give ratings in different countries. Consequently international conjoint projects can be an effective method of understanding common needs and desires across global markets.

International conjoint research

For many years, conjoint analysis was rarely used in international research because of the need for expensive face-to-face interviews. as conjoint analysis is not suitable for telephone research unless combined with some other methodology (eg post, or web-assisted interviewing).

Now with the dominance of internet research, conjoint analysis is much more readily used in an international context to gather and gauge pan-Global opinions and so ensure products and services are optimised to the widest possible market.

Design with an eye to local variations

The principles of conjoint design remain the same as with locally-based research in terms of breaking a product into attributes and levels, but there will be local nuances and differences in design that need to be taken into account.

These local factors may include regulations, cultural practices or tastes, and the challenge of different market structures. For instance in Spain and Southern Europe an indirect sales model still dominates compared to much more direct and online sales in the Northern part of Europe.

As a solid design is crucial for conjoint analysis, one of the first practical steps is to make sure the internal research design team brings in people from overseas markets to ensure that local differences are catered for in the design. Alternatively if a design is used per country, then co-ordination is necessary to bring the common attributes together in a way that will make for a solid end analysis at a global level.

Addressing language challenges

Naturally, the main challenge for an international conjoint project is language. Attributes and levels are defined in short tightly defined phrases and for specialist products core definitions need to be captured clearly.

It's an area that simple translation can struggle to get exactly the right nuance and meaning. Some simple things like a warranty or a guarantee can be slightly different concepts in different countries for instance, and where products are supplied in different ways - for instance through a long distribution channel in Southern Europe, or sold direct in the US or UK, this can affect elements of the product such as service or apparent pricing.

Handling pricing across borders

A second factor is pricing. Many companies operate different local price lists depending on the country and the distribution structure. These pricing realities need to be reflected in the design but may mean that the price range being tested is different in different geographies.

In addition at a practical level the prices as displayed have to reflect currency and number format differences (eg the use of the decimal comma versus the decimal point). For instance Germany is in the Euro, but German speaking Switzerland would expect prices in Swiss Francs, and different tax regimes may result in different prices even though each product has the same underlying cost (which affects price optimums).

Requirement for solid project management

These differences add a layer of complexity to the survey and introduce the potential for error or incompatibility between different questionnaire versions, especially if you have to create a separate questionnaire file for each language. Consequently high quality survey management is essential, both at the design stage, but also during quality checking and analysis.

Countries with multiple languages can add other problems. When sending out invites or using a panel, how do you cope with say Switzerland or Belgium where there are multiple language possibilities, or for countries with relatively small populations - how many languages are enough. In addition the legal framework for research and data differs by country and region.

The end benefits are better than scale-based research

But having dealt with the complexities, conjoint and other trade-off techniques like MaxDiff or BPTO have advantages over scale-based ratings in that results can be directly compared and amalgamated across countries.

With scale-based ratings there are often cultural factors between different countries that affect how the scales are used. For instance in France there is a tendency to give lower ratings than in Germany say, or for the Spanish to be a little less careful with consistency of answers.

Because conjoint involves understanding choices and looking at choices directly, these cultural aspects play a much lower part in answers, though issues such as differences in channels and differences in the expectations of service do become apparent, but by reducing the impact of cultural norms, the research can be used to assess which products and services best meet international needs.

When online surveys are not an option

In some markets it may still be necessary to use a telephone interview (eg business-to-business where reaching individuals by email is complex and response rates are very low) but it is now possible to combine conjoint and telephone through a web-assisted telephone conjoint project.

Our software allows an interviewer to telephone and recruit a respondent and then enables the interviewer and respondent to see the same web-page so the interviewer can lead the respondent through a web-based survey. As conjoint requires that choices vary by respondent, the web-pages are fully unique and tailored to the respondent enabling a full dynamic trade-off interview to take place while talking to the interviewer on the phone.

Leveraging our experience

We have experience in working on conjoint analysis projects globally, and specifically across Europe and the US, and into China and Asia, addressing the complex blend of local differences with the need to build comparative market models for product management and investment decisions.