CBC market simulator

The Market simulator (also known as the choice simulator) is often considered the most crucial decision-making tool in a conjoint project. It transforms conjoint utilities into actionable insights by simulating market choices between different product alternatives.

By introducing products defined by the attributes and levels in your study, the simulator generates projections of the percentage of respondents likely to choose each product (or choose "None," if the None option was included in your questionnaire). The market simulator allows researchers to conduct "what-if" analyses, exploring scenarios such as new product design, product positioning, and pricing strategy.

Think of the simulator as a "voting machine." After estimating the utility scores from your CBC exercise, you can simulate how your market might "vote" for each of the products you configure in the software. The results, or "shares of preference," represent the percentage of respondents likely to choose each product, and the total shares will always sum to 100%.

Once you have collected your conjoint data and estimated utilities, you may begin building a market scenario of competing product concepts. The simulator starts out with two empty products, allowing you to quickly start comparing two alternatives. You need at least one product alternative to start a simulation.

To begin, select the desired level from each attribute for each product alternative. Once a level has been selected for all attributes in the first product, the simulation will start to run. You can continue to build additional products, and the simulation will restart with each new product added.

The first step in using the market simulator is typically to define a base case scenario. This base case usually reflects a current or future market scenario: your brand versus the relevant competition. If there is no relevant competition or your conjoint study was designed to model only your product, the base case may consist of a single product versus the "None" alternative, reflecting a likely configuration.

After modifying the base case, add additional scenarios by clicking the scenario selector in the top right corner and clicking the plus () button in the fly out. This allows you to explore different market scenarios and compare various product configurations.

Should you desire, you can check the option to display 95% confidence intervals.

Assuming your respondents are representative of the population from which they were drawn randomly, you are 95% confident that the true population's share of preference falls within this interval.

You can also use the 95% confidence intervals to assess whether one product alternative is preferred to another. If the confidence intervals do not overlap between two product alternatives, you are at least 95% confident that one is preferred to the other.

There are two files that are available for download:

• Scenario: This is a .xslx file that contains the products created along with a table of their preference scores, the standard error, and the upper and lower 95% confidence intervals (identical to the tables viewable in Discover). Scores are rescaled.
• Charts: This exports a .png image of the scenario.

In analysis it's common to compare groups of people using their exercise scores. Segmenting allows you to take the results from a scenario simulations and split them into groups. These groups come from different responses/values for one of your questions or defined variables.

For example, you could use a demographic question or variable in your survey (like the respondent’s location) to segment the results to see how people in North America responded versus people in Europe.

To apply segmenting, click the Segmenting dropdown and select a question or variable from the menu. When a variable is selected, the chart will automatically update and the Segmentation icon turns green. Scenario results are then split into groups according to the selected variable. Respondents that don’t have any response (or value for defined variables) will be missing from the results. Similarly, segment groups that are empty are not included in the results.

To clear the segmenting or apply a different one, click the dropdown and select No segmenting or choose another option from the menu.