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Pricing Research

Price is the worth your company places on your product after considering the various costs involved in producing it. The consumer, on the other hand, may place a much higher or lower value on the various benefits your product offers. Pricing research can be used to explore the territory between what you want to charge and what consumers are willing to pay. Research can help marketers decide the most appropriate pricing strategy for a particular product or service.

Whether you are introducing a new product and need direction in determining a price, or whether you wish to increase the price of an existing product, pricing research can provide answers. We have expertise in a wide variety of pricing research techniques, including trade-off analysis, price sensitivity research, market volume assessment and test market research.

An Example

Issue

A bank has introduced a new prestige service package for upscale clients. It brings together various options previously offered as separate features, while adding several innovations. The marketing services team was convinced that clients would eagerly embrace the convenience and service improvements offered at the all-inclusive price of $12.00 per month. Instead, it appears that the program has failed. How could pricing research have prevented this and can it rescue the situation?

Solution

Prior to the launch of this service, or, in response to lower than expected sales, price sensitivity research could be conducted to assess the willingness of target customers to pay for the new "re-bundled" product proposition. This is done by asking target customers to respond to a range of potential price points for the product. Multivariate statistical analysis is then conducted on the responses to the range of possible price points to identify each of several price points and thresholds. For instance, price sensitivity analysis could have identified consumers’ perceptions of the optimal price for this service, the range of acceptable prices for the product, and the threshold price above which purchase resistance could be expected to increase due to perceptions of over-pricing.