Case Study: Understanding willingness to pay for benefits of specialty ingredients
Posted on 19 June 2019 Conjoint.ly
This disguised case study discusses the leading manufacturer’s methodology used to understand willingness to pay for benefits of specialty ingredients.
Context and objectives
This disguised case study discusses a leading specialty health foods ingredient manufacturer, Ingredients Co., and the steps they took to understand willingness to pay for benefits of specialty ingredients. Please note that company names and figures used in this educational case study are fictional and have been disguised to ensure confidentiality.
Ingredients Co. is wanting to demonstrate the value of its ingredients to their customers (health food manufacturers), who in turn want to develop products that consumers will find valuable. Their insights manager wanted to better understand; willingness to pay, consumer pain points and how to take share from competing products.
These insights needs were then specified as the following three research questions:
- RQ1: What is the willingness to pay for each of the benefits?
- RQ2: Which consumer pain points are most frequently occurring and most difficult to resolve?
- RQ3: Which Ingredients Co. ingredient has the greatest potential to take share from competing products?
Each research question was addressed via a separate module and looked at from different angles.
- Module 1 (Generic Conjoint) aimed to measure willingness to pay for benefits. In this module, we offered respondents choice of different benefits and associated price
- Module 2 (MaxDiff) measured perceived frequency and severity of different consumer problems
- Module 3 (Brand-Specific) aimed to identify the ingredients with greatest potential to take share from competitors (and with the current offering as a baseline)
Module 1: Generic Conjoint
Ingredients Co. were able to discover both willingness to pay across all respondents and willingness to pay by user type by using Generic Conjoint
Module 2: MaxDiff
By utlising MaxDiff, Ingredients Co. were able to discover which consumer pain points are most frequently occurring and most difficult to resolve.
Module 3: Brand-Specific Conjoint
Brand-Specific Conjoint was utilised to understand benefits that maximises share of preference for Ingredients Co. customers.
In summary, by utilsing the different angles of the three modules Ingredients Co. were able to identify the most valuable ingredients. Also, they were able to map the benefits and problems to ingredients, helping their insights manager successfully answer their research questions.
And used different metrics to find the most valuable ingredients