Solution of the Month- Menu Based Conjoint for Bundling
Television Media is facing serious competition from various online platforms that offer on demand services. After the Internet revolution in developing countries, all the media companies are re-evaluating their strategies to expand their portfolio and maximize revenue. On the similar lines, one of our client, top Media company wanted to know that which channels and bundles will attract the TV viewers and what is the pricing sweet spot to improve revenue. The key questions they had in their mind:
1. Which channels should be included in the bundles and which should be sold independently
2. What should be the optimal price of bundles and independent channels
3. What is the price sensitivity of the various bundles and channels
4. What should be the strategy if competitors change the prices of their offers
For a bundling problem like this, we suggested the most advanced technique of conjoint analysis, Menu based conjoint (MBC). However, the problem was complex from survey visualization and analysis perspective due to large number of channels and their bundles. /to deal with this, an interactive Menu based conjoint was programmed in which respondent could see the different channels and bundles along with their prices. They can select the bundles and can also select independent channels as per their choice. Different bundles, independent channels were exposed to different respondents with different prices.
Data was collected for 5000 respondents across metro cities in India. A comprehensive conjoint simulator was designed to run different models to derive the share of preference and revenue for different channels as ala carte and in bundles. Key insights were provided on redesigning of few pre-existing bundles, identifying ‘Hero’ channels for individual offering and role of HD in purchase scenarios. Final report was developed with our recommendations on different combinations of bundles and ala carte channels and strategy that can increase the overall consideration of viewers and help them to attain maximum preference across the country.