Case Study: Medical Imaging Company Uses Conjoint Analysis for New Product Development

Results

  • Our Client under-priced their product by more than $3,000.
  • The effect of re-pricing the product resulted in a profit of $3 million.
  • Likely adoption of the product would be between 25% and 35%.

Outcome

The study showed that:

  • One or two product features drove adoption rates
  • Four product configurations would be acceptable to the market and demonstrated that revenue and profit could be maximized at a price point that was more than $3,000 higher than the client initially intended to price the product.
  • Likely adoption rate would be between 25% and 35%
  • Assuming market penetration of 1,000 units over three years, the effect of pricing the product $3,000 higher would result in increased profit of $3 million.

Business Challenge

A leading medical imaging company was interested in developing a new product that would improve data communications between their products, medical imaging scanners, and a hospital’s patient record-keeping (PACS) system. The new product had been under development for several years and was near commercialization; however, there were still critical questions on which feature sets should be included in the initial product offering and how they should be priced.

Research Objective

Determine which product features are most valued by customers, which features customers would be willing to pay more for, and the likely adoption rate of the new product based on different price points.

Methodology

Choice-based conjoint analysis (CBC) was used to understand the relative value of five different product features relative to price.

A web-based conjoint analysis study was conducted with 100 Directors of Radiology at hospitals and imaging centers. Respondents were recruited to participate in the study by e-mail and telephone.

Since no similar products were currently on the market, the analysis focused on determining which feature set was most desired and how different price points would likely affect the product adoption rate.

Why AMG Research was Chosen

AMG Research was selected to conduct the research based on our ability to effectively reach the hospital and imaging center markets and our experience in using conjoint analysis for new product development and pricing issues.