Conjoint analysis in the Greenware case

The founders of Greenware had decided to take the firm's products (biodegradable disposable plates) to market. However, the firm had not yet decided on the optimal combination of design, packaging, and price. Greenware used conjoint analysis to quantify consumer preferences and willingness to pay for different attribute combinations. Analysis was focused on four key parameters- look and feel (weathered, natural, refined), design (traditional/round, trendy/thin and flat, modern/square and hexagonal), packaging (plastic-wrapped, wrapped edges only, carton box), and price ($6, $7, or $8 per dozen). A total of 15 combinations were tested via conjoint analysis. The analysis revealed a very strong preference for the $6 price, reasonably strong preferences for smoothness level B and traditional/round design, and a weak preference for wrapping only the edges of the product in plastic. These preferences, revealed in aggregate analysis, held for the subsets of environmentally conscious consumers and likely-to-purchase customers as well.

Greenware followed some of the results of its conjoint analysis. The firm (subsequently renamed Verterra) chose the round design as the base of its initial offering. The firm was concerned about the environmentally unfriendly aspects of plastic wrapping, waste concerns of leaving the top and bottom plates exposed and likely to be discarded, and the cost concerns of cardboard cartons. Given the relatively weak consumer packaging preferences, Verterra felt comfortable delaying packaging decisions by initially focusing on bulk packaging, and delaying consumer offerings until more environmentally friendly and inexpensive packaging was unavailable.

Verterra did not follow the results of the conjoint analysis with reference to look/feel and price, however. The firm chose to position itself as a relative luxury brand, choosing the smoothest and most expensive (type A) look and feel, and charging a price higher than any that had been tested under conjoint analysis. Verterra's strategy appears to have been successful, as the firm has been able to expand into additional products (plates, bowls, and trays, all of multiple sizes) and has captured significant positive publicity.