Central to the consumption decision of
individuals is the marginal satisfaction of the last dollar spent to buy goods
or services (Samuelson, 2010), and looking at the results of the conjoint
analysis of the movie theater, this definition is clearly expressed. Although, the price of the ticket is a basic
requirement on decision making of movie-goers, but other attributes also
provide a succinct impact on these decisions.
The results shows how consumers would want
to get the most of their dollar spent. For instance, a consumer would prefer to
spend $6.00 on a staggered big seats with cup holder on a large digital THX
than the same amount [$6.00] for unstaggered average seat without cup holder on
a small screen-plain sound theater. The results shows that we look for
combinations of attributes that can give the best comfort and can provide a
marginal utility on the dollar being spent.
Moreover, the result also shows that even
if the person would want to have food during the film-viewing, but it does not
greatly affect their decision-making if same thing is offered across all
options. Food, in this case, is ordinal or dimensionless because of the fact
that what's being served may not well satisfy the need of the person – and the
notion that he or she can buy food that will satisfy him or her makes the food
attribute less importance in decision-making of the moviegoer.
For the movie theater conjoint analysis,
market-value-based segmentation is eclipsed by the benefit segmentation
approach to the attributes of the product or good. The approach focuses on how
attributes can be combined to meet the expectation of the consumer (Lamb,
et.al., 2008). The movie theater provides several combinations of options that
can met the need of consumer. What will be the most central theme of consumer's
decision? For this segment of the market, what do they need?
For instance, those who go to the movie
house alone may find appealing average seats without cupboard, but families may
not find that good especially of kids are around. Through the different
options, each of the possible market segment can get the satisfaction they
need. By looking at the demographic, the movie theater was able to create
possible options that will appeal to the environment and behavior of consumers.
Basically, it is essential to note the
level of relevance or importance of the attribute to the segmentation. In our
options, an attribute is added to a factorial combination to meet certain level
of value. An attribute may have great importance on the decision-making of the
person and another may not have, but with careful combination, these attributes
will work together to create value on the market segment it is intended to meet
their requirements.
Nonetheless, managers are guided to make
decisions based on looking at possible “what-ifs” that may affect the forecast
capability and achievement of the movie theater. On changes of factorial
combinations, the sensitivity analysis is essential and vital to correctly
address issues on level of feasibility and marketability of the changes.
What if price value of the options are
changed, will these options still work to meet demands of consumers and give
them high marginal utility of every dollar spent? Or what if snacks will be
changed, instead of fixed snacks, consumers be given freehand on choosing their
snacks, how will this affect the decision-making or choice of consumers?
According to Schrader (2007), the
exposition of utility is clearly bound on the fundamental aim of economic
behavior. It is impossible to separate the value of satisfaction from the
behavior of the economy, as based on the consumer behavior. In the airline
travel conjoint analysis, this notion of utility or satisfaction is clearly
tied with comfort and ease. Even if the analysis is based on a person level,
you would still want to arrive at the destination smoothly and stress-free.
This is the reason why the type of flight route has a big relevance on the
decision-making. In the market-value-based segmentation, it speaks of the
universal perception as being the basis of the segmentation. This holds true to
this analysis, the universal perception that people want to arrive in their
destination without the stress of transferring to another plane or waiting at
the airport is very apparent.
The part-worth attributes result shows the
seemingly less importance of brand compared to the value of convenience and
comfort. We don't give high regard to the name of the plane we ride as long as
it can deliver the comfort we need. In the same manner, the price of the flight
does not qualify much to the requirement considered in choosing a travel
flight, even at a personal level.
To understand the benefit segmentation and
value profile of the options provided, it is necessary to see the market
segment of the industry. The market is not too defined as to its demographic,
unlike other vertical markets. Instead, it works on a universal understanding
on what people need, which is more of a market-value-based segmentation than
benefit segmentation. But to some respect, benefit is still a matter of
relevance. For instance, one does prefer to ride a planes have movies during
the flight. For consideration, JFK to LAX is not too long a flight, but it will
keep you seated for almost half a day. A movie is preferred to provide
relaxation.
Moreover, a traveler would care less if the
airline has frequent fliers. Due to the high level of available options, the
value of frequent fliers has considerable dropped. This notion is tied on the
idea that as long as there is a flight for that day, irregardless of the price,
comfort and convenience is the best things. People cannot possibly wait for an
airline to have a flight from JFK to LAX because their options are high.
However, if we draw lines of sensitivity,
what if there is only one airline in the area and the frequent flier is a
connecting flight, will the traveler consider the stress and tiresome travel
the best? This is a very important part of the decision-making most consumers
do – and this should be part on how airline companies do their marketing. The
“what ifs” provide an alternative look at the value of the attributes when
things are changed. In this case, although the enrollment in a flight program
does not have big weight on the decision of travelers, but if the “what if”
situation above is taken into account, the enrollment in a flight program would
be a major and relevant consideration to decision-making.
To say, there are several scenarios that be
possibly conceived with regards to the factorial combinations. However, it is
very essential to evaluate the part-worth value of each as to the product value
of the option. Decisions must be carefully drawn to meet every possible “what
ifs” of the business to ensure the marketability of the option.
