Conjoint Analysis: Calculating Source of Volume
Source of volume is multidimensional
For source of volume the main thing you will want to look at is how units shift among the competing products. For example, if your product gains 300 new units for a new scenario, it is reasonable to ask where did those units come from. How much of that is cannibalization vs coming from competitors.
Of course beyond units, sometimes it makes sense to look at how the revenue and profit forecasts for each product change too.
Volume will source more from products with similar utility
Often the biggest commonality between products is they are in the same category and deliver the same benefits. In that case, you will see the volume sourced roughly in proportion to the market share of the other competitors.
Another commonality is when products have the same attributes.
Do I need to worry about the red bus blue bus problem?
Usually not. (remind me what that is again)
There are two reasons it isn't as big of a concern as it was back in the 90's. First, we use heterogeneous models. That is the "H" in HB that you've probably heard about. Second, we found using draws from the upper-level model additionally diminish the red bus problem.
In certain circumstances, it is still big enough issue that needs special consideration. Luckily there are several tools developed in the early 2000's that can be utilized. However, they aren't needed nearly as often as they were back then.
