Independent Course of Study

Application of Analytics on New

Product Design
Presented by:
Dhruv Maniar
M1603
MBA (2016-18)
 Index
• What is Business Analytics?
• What is New Product Design?
• Conjoint Analysis Technique.
• Primary Study on New Product Design.
 Business Analytics
• A scientific process of transforming data,
information technology, statistical analysis,
quantitative methods, and mathematical or
computer –based models into insight for
making better decisions.
• It is used for data-driven or fact-based
decision making, which is often seen as more
objective than other alternatives for decision
making.
 Application of Business Analytics
• Management of customer relations
• Marketing activities
• Financial activities
• Supply chain management
• Human resource planning
• Pricing decisions
• Sport team game strategies
 New Product Design
• In a fast changing world, companies must
innovate or face extinction.
• Yet while new products are essential for
survival, they do demand high investments
and pose great risks, with uncertainties
lingering at all stages of development and
launch of products.
 New Product Design
• New Products can be classified as:
– New to the world products
– New product lines (new to the firm)
– Addition to the existing lines
– Improvements & revisions to existing products
– Based on new application or use
Four stages in NPD
 New Product
• To design an Illuminating Shuttlecock to play
Badminton in the dark.
 Tools used: Conjoint Analysis
• Learn how prospective buyers of a product,
value the product’s attributes. The best
attributes in the product will sell the most.
• Help in selection of features to be offered in
new product.
• To help set the price of the new product.
• To try a new product concept.
• To determine the composition of the most
preferred brand.
 Statistical terms associated:
• Part-worth function: Also called utility
functions describe the utility consumers
attach to the level of each attribute. Denoted
by symbol “α”.
• Relative importance weight: These are the
estimated and indicate which attributes are
important in influencing consumer choice.
• Attribute levels: It denotes the values
assumed by the attributes.
• Constructing the Stimuli: We have total of 64
profiles from the following attributes that we
want in our illuminated shuttlecock.
 Display of all 64 combinations
• MR- New Product\NPI- Conjoint Data -
Glowing Shutlecock.sav
Orthogonal data with 16 combinations
• MR- New Product\Orthogonal Design Data.sav

• This file also included the survey response

from 75 respondents, and the dummy
variables.
 Survey
• MR- New Product\Questionnaire.pdf

• Combined Response:
• MR- New Product\Questionnaire Collection-
Shuttlecock WB.xlsx
Output Data
 Interpretation of Results
• The model estimated is represented as:
U= b0 + b1X1 + b2X2 + b3X3 + b4X4 + b5X5 + b6X6 + b7X7 + b8X8
• For Feather, we have following:
 α11 – α12 = b1 , α11 + α12 = 0
 On solving we get, α11 = -0.042 & α12 = 0.042
• For Base:
 α21 – α22 = b2 , α21 + α22 = 0
 On solving, α21 = -0.075, α22 = 0.075
• For Illuminated Colour:
 α31 – α34 = b3, α32 – α34 = b4, α33 – α34 = b5, α31 + α32 + α33 + α34 = 0
 On solving, α31 = 0.057, α32 = -0.123, α33 = 0.060 & α34 = 0.006
 Interpretation of Results
• And for Price,
 α41 – α44 = b6, α42 – α44 = b7, α43 – α44 = b8, α41 + α42 + α43 + α44 = 0
 α41= -0.417, α42 = -0.274, α43 = 0.224 & α44 = 0.465.

• Sum of ranges of part-worth = (0.042-(-0042)) + (0.075-(-0.075))

+ (0.060-(-0.123) + (0.465-(-0.417))
= 1.229
• Relative importance of Feather = (0.042-(-0042)) /1.229 = 0.06
• Relative importance of Base = (0.075-(-0.075)) /1.229 = 0.12
• Relative importance of Illuminated Colour = (0.060-(-0.123)
/1.229 = 0.14
• Relative importance of Price = (0.465-(-0.417)) /1.229 = 0.68
 Relative
Level Part-Worth
Attributes Level Dummy importance
Description α
%

1 Bird X1 -0.042
Feather 6%
2 Plastic 0.042
1 Rubber X2 -0.075
Base 12%
2 Cork 0.075
1 Red X3 0.057
Illuminated 2 Blue X4 -0.123
14%
Colour 3 Yellow X5 0.06
4 Green 0.006
1 Rs. 50 X6 -0.417
2 Rs. 80 X7 -0.274
Price 68%
3 Rs. 120 X8 0.224
4 Rs. 150 0.465
 Interpretation of Results
• Relative importance of Feather = (0.042-(-0042)) /1.229 = 0.06
• Relative importance of Base = (0.075-(-0.075)) /1.229 = 0.12
• Relative importance of Illuminated Colour = (0.060-(-0.123)
/1.229 = 0.14
• Relative importance of Price = (0.465-(-0.417)) /1.229 = 0.68

• Hence, we can interpret that features like Plastic feather,

Cork base, Yellow Illuminated color & Priced at Rs. 150 have
high utility.
• From Model Summary table, we see that value of R2 is 0.994
from regression analysis, which indicates a good fit.
Thank You!