What is Conjoint Analysis?
Conjoint Analysis is a survey technique and model used to measure consumer preferences for products and services. The name "conjoint" comes from the phrase "Considered Jointly" because it almost always involves a comparison of one product with another. It's all about making trade-offs between alternatives, instead of evaluating one product in isolation. The trade-offs consumers make when choosing between products in a conjoint survey are used to "reveal" how strongly different product attributes drive consumer preferences and choices.
Utility is a term economists use that means "the value consumers derive from the use of a products." The underlying assumption of conjoint analysis is that a consumer's overall value, or utility, for a product is a weighted sum of the value of each of its parts.
In a conjoint analysis, one does not need to describe a product in terms of all of its possible attributes. Instead, one can use a set of attributes that are sufficient for the purposes of the analysis, and tell respondents that all other attributes will be held constant for the purpose of the exercise.
Conjoint analysis is not just used in litigation. It is a widely used type of quantitative market research that has been around for over 45 years and is the subject of an enormous amount of academic research.
HOW IT WORKS
Conjoint analysis forces respondents to make trade-offs to determine utility for a product with a particular set of features. Respondents are presented with a series of choices tasks that represent product choices by several attributes and levels of those attributes.
Conjoint Analysis in Litigation Cases
MARKET RESEARCH SURVEYS FOR USE IN LITIGATION
In 1975, Federal Rule of Evidence 703 allowed survey data to be used as evidence in legal proceedings, stating that surveys were allowed if they were "of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject." The focus also shifted to whether surveys were "conducted in accordance with generally accepted survey principles" and the "results were used in a statistically correct way."
Today, litigators work with survey researchers to obtain information on people's attitudes, behavior and preferences.
CONJOINT ANALYSIS FOR CLASS ACTION LITIGATION
Conjoint Analysis can provide a basis for the the calculation of damages for class action matters and has been used successfully in class actions where courts have granted class certifications. It is well adapted to the benefit of the bargain theory of a class action case. When looking at using conjoint analysis for class action surveys, there are several important outputs from conjoint analysis that may be pertinent to a case. Conjoint analysis can calculate:
- Reduction in market value due to the possible absence of a promised feature
- The price premium due to the presence of a feature
CONJOINT ANALYSIS FOR PATENT INFRINGEMENT CASES
It also has been used for patent infringements cases in order to establish a reasonable loyalty for the patents at issue.
Conjoint Analysis Survey Process for Litigation Matters
Although every case is at least slightly different, the key steps of the survey process are generally as follows:
1. Conduct Exploratory Research: Determine who to survey, how to qualify people in the survey sample, if they can be recruited in high enough numbers and what to ask.
2. Design and Program Questionnaire: Choose and develop right attributes and levels and program in Sawtooth Software.
3. Pretest Survey Questionnaire: Validate questions and assure they are unbiased/non-leading. Ensure attributes and levels are meaningful, clear and expressed in consumers' terms.
4. Field Survey with Online Panel: Partner with a reputable online sample provider to field survey and manage data collection.
5. Analyze Data and Write Expert Report: Clean and analyze collected data. Write an expert report of the findings.
Considerations When Conducting Conjoint Analysis
When deciding whether conjoint analysis is a methodology to consider using for a case, it is important to think about a number of issues related to the design and execution of a conjoint study.
DESIGN ISSUES & OTHER CONSIDERATIONS
- Setting up and running a conjoint can be relatively easy; choosing the attributes takes the most effort
- Expert and research firm should be well-versed in conjoint survey and analysis methods
- Work with an economist who knows how to calculate damages using conjoint results, specifically for class action matters
- Consider if the set of products at issue can be described by a single conjoint analysis
- Determine if there are enough consumers to recruit to take the survey
- Assess if a survey can be developed so that people can understand and evaluate the attributes and products that are shown or described in the survey
- Determine if the range of market prices can be examined and incorporated to deal with supply-side issues
Conjoint Case Examples
CLASS ACTION LITIGATION CASE EXAMPLES
Below is a list of some major cases that have survived a Daubert Challenge, if there was one, received class certification, and received a favorable settlement to the best of our knowledge. In each of the following cases, Steven Gaskin was the conjoint analysis survey expert.
- Sanchez-Knutson v. Ford Motor Company
- Lenovo Adware Litigation
- Khoday & Townsend v. Symantec Corp. and Digital River, Inc.
- Kenai Batista et al. v. Nissan North America, Inc.
PATENT INFRINGEMENT CASE EXAMPLES
Below is a list of case studies that discuss patent infringement cases that used conjoint surveys.