Posted on 17 November 2016
For each conjoint study on Conjoint.ly, one of the outputs we provide is an Excel profitability model (also known as CBC simulator). By letting you simulate the market environment, it lets you estimate the profitability of your new product development (NPD). These calculations are based on a simple model:
Here is how it works:
Step 1. Specify marginal costs and revenue for each level:
Step 2. Describe the current market landscape in the language of attributes and levels. Include both your current competitors, as well as any of your own products. We will estimate market shares based on the responses of the experiments’ participants. They might not necessarily match actual market shares, because they do not take into account things like distribution, promotions, etc. However, if you specified the key drivers of customer behaviour among your attributes and if you specify all the main products, the simulated market shares should be close to reality.
Step 3. Describe the future market landscape (what products you expect to see on the market when you launch your new offering). This is where our simulator (with one click) will help you decide on the best new product development, taking into account the following information: