Experiment was conducted on friend Mr Prachit Jamdar to find preference score to measure the

choice for 4x4x4x4 using conjoint analysis with effect & dummy coding method.

The following variables were used to find consumer preferences from the given 216 combinations
possible.

1) Car Type
(i) Hatchback
(ii) Sedan
(iii) MuV
(iv) SUV
2) Fuel type
(i) Petrol
(ii) Diesel
(iii) Electric
(iv) CNG
3) Brand
(i) Maruti Suzuki
(ii) Hyundai
(iii) Volkswagen
(iv) Mahindra
4) Car Mileage
(i) Between 10 to 14 kmpl
(ii) Between 14 to 18 kmpl
(iii) Between 18 to 22 kmpl
(iv) 22 kmpl & above.

Note : kmpl refers to kilometres per litre.

For Electric car kmpl is converted by using petrol per litre price & indexing it with per unit electric
cost. Similar indexing is used for CNG fuelled car.

SUV, CNG, Mahindra & 22 kmpl & above were kept as reference & consumer’s preference was
measured in respect to these variables. Both Dummy Coding & effect coding methods were used to
study the relative preferences.

Measurement Scale: The consumer’s preference were gauged by asking them to rate the alternative
on a scale of 1 to 5, where

1 is least preferred

2 is some what preferred

3 is moderately preferred

4 is very much preferred

5 is Most preferred.
(i) Dummy Coding.

Model Summaryb

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .810a .656 -.033 1.08012

a. Predictors: (Constant), Btw_18to22_kmpl_Dummy, Diesel_Dummy,

Volkswagen_Dummy, Btw_10to14_kmpl_Dummy, Petrol_dummy,
Hyundai_Dummy, Sedan_Dummy, Electric_Dummy,
MarutiSuzuki_Dummy, MUV_Dummy
b. Dependent Variable: Preference_Sore

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1 Regression 11.104 10 1.110 .952 .559b

Residual 5.833 5 1.167

Total 16.937 15

a. Dependent Variable: Preference_Sore

b. Predictors: (Constant), Btw_18to22_kmpl_Dummy, Diesel_Dummy, Volkswagen_Dummy,
Btw_10to14_kmpl_Dummy, Petrol_dummy, Hyundai_Dummy, Sedan_Dummy, Electric_Dummy,
MarutiSuzuki_Dummy, MUV_Dummy
 Coefficientsa

Unstandardized Standardized
Coefficients Coefficients Collinearity Statistics

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) 2.833 .882 3.213 .024

MarutiSuzuki_Dum
1.083 .882 .456 1.228 .274 .500 2.000
my

Hyundai_Dummy 1.000 .764 .421 1.309 .247 .667 1.500

Volkswagen_Dumm
-.750 .764 -.316 -.982 .371 .667 1.500
y

Petrol_dummy -.250 .764 -.105 -.327 .757 .667 1.500

Diesel_Dummy -.750 .764 -.316 -.982 .371 .667 1.500

Electric_Dummy .333 .882 .140 .378 .721 .500 2.000

Sedan_Dummy .250 .764 .105 .327 .757 .667 1.500

MUV_Dummy -.250 1.528 -.105 -.164 .876 .167 6.000

Btw_10to14_kmpl_
5.097E-17 .764 .000 .000 1.000 .667 1.500
Dummy

Btw_18to22_kmpl_
.333 1.764 .126 .189 .858 .154 6.500
Dummy

a. Dependent Variable: Preference_Sore

Based on Unstandardized coefficients we can conclude that the consumer preferred Maruti Suzuki &
Hyundai in comparison to Mahindra & disliked Volkswagen.

The preference of Fuel in order are Electric , CNG ,Petrol & Diesel.

The preference of Car design order are Sedan , SUV & MUV. The consumer hasn’t showed liking for
hatchback.

The preference for Car Mileage is order are 22 & above kmpl, 18 to 22 kmpl & 10 to 14 kmpl. The
consumer has discredited 14 to 18 kpml range car.

The following variables were removed Hatchback & 10 to 18 kmpl mileage range.
 (ii) Effect Coding

Model Summaryb

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .810a .656 -.033 1.08012

a. Predictors: (Constant), Btwn_18to22_kmpl, Diesel_Effect,

Volkswagen_Effect, Petrol_Effect, Hyundai_Effect, Btwn_14to18_kmpl,
Btwn_10to14_kmpl, Electric_Effect, MarutiSuzuki_Effect, MUV_Effect
b. Dependent Variable: Preference_Sore

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1 Regression 11.104 10 1.110 .952 .559b

Residual 5.833 5 1.167

Total 16.937 15

a. Dependent Variable: Preference_Sore

b. Predictors: (Constant), Btwn_18to22_kmpl, Diesel_Effect, Volkswagen_Effect, Petrol_Effect,
Hyundai_Effect, Btwn_14to18_kmpl, Btwn_10to14_kmpl, Electric_Effect, MarutiSuzuki_Effect,
MUV_Effect

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 3.083 .292 10.571 .000

MarutiSuzuki_Effect .750 .573 .515 1.309 .247

Hyundai_Effect .667 .481 .458 1.387 .224

Volkswagen_Effect -1.083 .481 -.745 -2.254 .074

Petrol_Effect -.083 .481 -.057 -.173 .869

Diesel_Effect -.583 .481 -.401 -1.214 .279

Electric_Effect .500 .573 .344 .873 .423

MUV_Effect -.500 1.528 -.344 -.327 .757

Btwn_10to14_kmpl -.083 .481 -.057 -.173 .869

Btwn_14to18_kmpl .167 .481 .121 .347 .743

Btwn_18to22_kmpl .500 1.718 .320 .291 .783

a. Dependent Variable: Preference_Score

From Standardized coefficients, it can be inferred that the consumer considers Volkswagen closer to
Mahindra than Hyundai & Maruti Suzuki.
For Fuel the Consumer considers Diesel & Petrol closer to CNG than Electric.
The consumer finds MUV closer to SUV. Hatchback & Sedan are found to be insignificant to his
choices.

Comparing both the results:

Base Variable written in ()

Dummy Coding Effect Coding

Brand (Mahindra) Brand (Mahindra)
Liked Closer
Maruti Suzuki Volkswagen
Hyundai
Farther
Disliked Hyundai
Volkswagen Maruti Suzuki

Fuel Choice (CNG) Fuel Choice (CNG)

Liked Closer
Electric Diesel
Petrol
Disliked
Petrol Farther
Diesel Electric

Car Design Type (SUV) Car Design Type (SUV)

Liked Closer
Sedan MUV

Disliked Farther
MUV NA

Fuel Mileage (22 and Above ) Fuel Mileage (22 and Above )
Liked Closer
18 to 22 kmpl 10 to 14 kmpl
10 to 14 kmpl

Disliked Farther
NA 14 to 18 kmpl
18 to 22 kmpl

Profile of the Consumer

The consumer can be profiled as having preference to sedan with mileage in the 18 to 22 & above
kmpl bracket & with CNG or Electric type of fuel either of Maruti Suzuki or Hyundai.
Question No. 2

Complex Experimental Design in Marketing Research

In complex experimental design, we try to establish causal relation between dependent variable &
independent variable under the between selected experimental groups under influence of different
treatment variable.

Example

We consider 4 different group of people having similar demographics with in each group but
different among the groups. These 4 groups are randomly shown different brand ambassador each
& then we measure the respondents brand connection. Here the 4 different groups become
experimental group, the demographic parameters of each respondent become independent
variable, the brand connect is dependent variable & different brand ambassadors are treatment
variable.

Limitations of each method.

Completely randomized design

As levels in a variable are selected randomly, there is no provision for controlling co-variate. The
problem can become acute is there is high degree of collinearity among independent variables.

Factorial design

A full factorial design will increase the number of combinations, as each level in a variable will have a
multiplication effect on the number of combinations being studied. Conducting such complex
experiment may require more time & resources. (i.e with a 3x3x3 model will have 27 combinations
while a 5x5x5 will have 125 combinations)

Randomized Block design

Only one major external variable can be considered for conducting the research.

Square Design

Because of square design, it requires equal number of independent, dependent & treatment
variable. Do not permit the external variables to interact with other or with independent variable.
Overcoming the limitations in each method:

Completely randomized design

The experiment can be carried over different times to check whether the internal validity of the
derived results holds true with similar set of experimental groups. This also helps establish external
validity.

Factorial Design:

As all the possible combinations cannot be applied, a set of best possible combinations of the
interest to the research should be select or the experiment must be carried out in small
experimental groups & the combinations which show best results should be considered for
experiment. Multiple small groups helps build the internal & external validity of the model & bring
the co-variates under control so that the main experiment can be performed with select /focused
combinations.

Eg We have 5 x 5x5 options for Housing apartments ie. Size (1000 sq ft. /1200 sq ft. / 1500 sq ft
1800 sq ft/ 2000 sq ft) , Floor ( 1st floor,2nd floor, 3rd floor, 4th floor, 5th floor) & colour (blue/white /
green / pink / yellow)

After prioritizing & selection we come to the final 3x3x3 as (1000 sq ft / 1500 sq ft / 2000 sq fr) with
(2nd floor/ 4th Floor / 5th Floor) & colour ( white / pink/ Yellow) .

Randomized Block design

The control variable should be blocked in appropriate intervals to clearly gauge the behaviour of
consumer. Ie. We create the block such that the internal validity is high.

Square Design

Two or more factors/variables can be combined to create one variable. For e.g. We have two
variables like Height & Weight. Both of them can be combined into a single variable like B.M.I.

Or The two /three variables can be reduced by normalizing (x-mean/ Std Dev.) & then combining.
But one must take care that all other variables are also normalized or else there will be bias.