Menu-Based Choice: A Conjoint Methodology for Bundling and Menu Configuration

Menus Are Everywhere

Menu-Based Choice (MBC) is a method that allows testing of very realistic purchase situations where:

There is a choice between a la carte items versus a bundle

• The bundle may be a single choice, but one to many of the a la carte options could be chosen

The product is configured based on various feature choices

• Some features might have to be included, others can be added on as options

The decision has more than one step

• Make a mutually-exclusive choice (a primary product choice)

• Then add desired features to the chosen product

Menus are everywhere from restaurants, to choices among telecom providers (with all their respective bundling options), configuration of vehicles, banking options, insurance coverage, computers, prescription of drugs to a patient, etc.

MBC Can Help Accomplish Objectives Such As:

• The optimization of a menu of offerings, and at what prices.

• The preference for a bundled offering versus a la carte items, and at what prices.

• The features that are most desired in a product, and at what prices.

The Breakthrough

Menu-Based Choice (MBC) is a breakthrough in conjoint methodology. Whereas the majority of the history of conjoint analysis has been focused on asking respondents to choose something or something else, MBC allows us to model choosing something and something else.

Considerations

MBC studies need larger sample sizes than other conjoint techniques. N=800 is typical; more if the menu is complex.

Price is usually an attribute. Varying prices of menu items helps create trade-offs that help us understand the value of each item.

Individual level preference data can be carried forward into outside analyses such as segmentation analysis.

To discuss whether MBC is right for your project, contact us at contactus@elucidatenow.com.