Many products that marketers sell can be thought of as a bundle of features. The challenge...
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Many products that marketers sell can be thought of as a bundle of features. The challenge for the marketer is to identify which particular combination of features is the most likely to maximize profits. One common way marketers try to solve this problem is through the use of conjoint analysis. Conjoint analysis comes in many forms, but at its core it is a type of experiment that is designed to find out (a) what is the optimal bundle of features a consumers desires for a particular product, and (b) how much value a consumer places on any one particular feature. Click the icon to view the additional information about the "Tailigate Chilaxin' Cooler" and its possible combinations. I Click the icon to view the product costs as well as the customer valuation. Assume a customer is willing to pay exactly how much they value their ideal cooler. What is the MAXIMUM price a customer would be willing to pay for their ideal vernion of the cooler? The maximum price a customer would be willng to pay for their ideal veraion of the cooler is $ 58. (Round to the nearest dollar.) In terms of how a customer values the cooler, what is the WORST possible combination? The worst possible combination is 24 can storage, 2-speaker, Individual Legs. If we try to maximize the per unit contribution of cooler sales, what would that contribution value be? The maximum per unit contribution would be $ 7. (Round to the nearest dollar.) What features would this cooler have? 36 can storage, 4-speaker, Individual Legs In this particular scenario, a marketer is trying to decide the best way to finalize the design of its "Tailgate Chillaxin' Cooler." The cooler serves as a normal beverage cooler, but it also has the added benefit of having an included sound system as well as a set of collapsible legs that allows it to act as a minitable. The company can only afford to bring a single version of the "Tailgate Chillaxin' Cooler" to market right now. However, it has a number of decisions it still needs to make. Cooler size: (1) 24 can storage or (2) 36 can storage. Speaker system: (1) Compact 2-speaker system or (2) larger 4-speaker system. Folding legs system: (1) individually-removable legs or (2) instant 'ez fold' quick collapse legs. The marketer has 8 different possible combinations of "Tailgate Chillaxin' Cooler" to choose from. Each feature adds a different level of value to the consumer, and each different feature costs the marketer a different amount of money to place it on the cooler. Each feature has an underlying cost as well. In addition, a conjoint experiment was ran among potential customers for "Tailgate Chillaxin' Cooler." The results revealed how much value (in $) potential customers place on each feature combination. The results of the conjoint experiment are also reported in the popup button below. %3D Feature Valuations from Cooler Feature Marginal Customer Conjoint Analysis Costs 24-can 36-can 24-can 36-can Storage Storage Storage Storage Cooler Size $6 $9 $12 $23 2-speaker 4-speaker 2-speaker 4-speaker Speaker System $15 $16 $7 $20 Individual EZ Fold Individual EZ Fold Legs Legs Legs Legs Folding Legs System $8 $13 $3 $11 Other Unit Baseline Costs Valuation $6 $2 Many products that marketers sell can be thought of as a bundle of features. The challenge for the marketer is to identify which particular combination of features is the most likely to maximize profits. One common way marketers try to solve this problem is through the use of conjoint analysis. Conjoint analysis comes in many forms, but at its core it is a type of experiment that is designed to find out (a) what is the optimal bundle of features a consumers desires for a particular product, and (b) how much value a consumer places on any one particular feature. Click the icon to view the additional information about the "Tailigate Chilaxin' Cooler" and its possible combinations. I Click the icon to view the product costs as well as the customer valuation. Assume a customer is willing to pay exactly how much they value their ideal cooler. What is the MAXIMUM price a customer would be willing to pay for their ideal vernion of the cooler? The maximum price a customer would be willng to pay for their ideal veraion of the cooler is $ 58. (Round to the nearest dollar.) In terms of how a customer values the cooler, what is the WORST possible combination? The worst possible combination is 24 can storage, 2-speaker, Individual Legs. If we try to maximize the per unit contribution of cooler sales, what would that contribution value be? The maximum per unit contribution would be $ 7. (Round to the nearest dollar.) What features would this cooler have? 36 can storage, 4-speaker, Individual Legs In this particular scenario, a marketer is trying to decide the best way to finalize the design of its "Tailgate Chillaxin' Cooler." The cooler serves as a normal beverage cooler, but it also has the added benefit of having an included sound system as well as a set of collapsible legs that allows it to act as a minitable. The company can only afford to bring a single version of the "Tailgate Chillaxin' Cooler" to market right now. However, it has a number of decisions it still needs to make. Cooler size: (1) 24 can storage or (2) 36 can storage. Speaker system: (1) Compact 2-speaker system or (2) larger 4-speaker system. Folding legs system: (1) individually-removable legs or (2) instant 'ez fold' quick collapse legs. The marketer has 8 different possible combinations of "Tailgate Chillaxin' Cooler" to choose from. Each feature adds a different level of value to the consumer, and each different feature costs the marketer a different amount of money to place it on the cooler. Each feature has an underlying cost as well. In addition, a conjoint experiment was ran among potential customers for "Tailgate Chillaxin' Cooler." The results revealed how much value (in $) potential customers place on each feature combination. The results of the conjoint experiment are also reported in the popup button below. %3D Feature Valuations from Cooler Feature Marginal Customer Conjoint Analysis Costs 24-can 36-can 24-can 36-can Storage Storage Storage Storage Cooler Size $6 $9 $12 $23 2-speaker 4-speaker 2-speaker 4-speaker Speaker System $15 $16 $7 $20 Individual EZ Fold Individual EZ Fold Legs Legs Legs Legs Folding Legs System $8 $13 $3 $11 Other Unit Baseline Costs Valuation $6 $2
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