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Customers today can choose from a wide range of products and services in almost all markets – both for everyday consumer goods and for larger purchases such as a car or services such as insurance or telecommunications subscriptions that bind the customer to a company.
The customer is spoilt for choice and has to make a decision. He does so according to very different criteria: Sometimes essential features that competing products do not have are decisive, sometimes the packaging is simply particularly appealing. Or is it ultimately the price that convinces?
For companies, it is crucial to know the decision-making criteria for their own sector and to optimise them compared to the competitors’ offers. Price research has a special role to play here: on the one hand, the price is of course decisive for the company’s profitability; on the other hand, price perception and willingness to pay on the customer side is a very dynamic and rarely objectively assessed field.
In order to effectively advance product optimisation, it is important to know how the target group perceives, uses and evaluates the product: How must the design and packaging be created to catch the eye and appeal? Which name suits the product best? Which product features are important, which are just “nice to have”, and which are even dispensable? How do users experience the offer? Where are the pain points and where are the enthusiasm factors of a product? Only products that are optimally designed in all these respects will be able to exploit their full market potential.
In order to position your own product correctly in the competitive environment, it is important to analyse your competitors: Who is the market leader and why? How is your product positioned in the market environment, which competitor’s product is yours most similar to? The point here is to learn from already established competitors, but also to set your own product apart from others and make it particularly attractive through unique selling points.
Prices are often set with desk research, which primarily looks at production costs and competitors’ prices. In many cases, the customers’ willingness to pay is not taken into account. However, in order to determine the optimal price, it is essential to know this willingness to pay and the demand that exists at a certain price (price-sales function). Price research is one of the most complex research fields in market research and one of the most strongly influenced by customers’ decision biases. For some products there is quite precise knowledge about prices, for others not; for some there is a high level of price acceptance, for others not. And there are other framework conditions that influence the willingness to pay. Here, profound expertise in both classical price research methods and in the research field of behavioural economics is necessary to collect reliable data on the design of prices.
The most important question before launching a new product is: How big is the market for it? Surveys of (potential) customers are an important part of calculating sales volume and potential: Is there general interest in the product? At what price would it be bought? What are the characteristics of these potential buyers? What are the reasons for not buying? Markets are dynamic, so even established products should be subjected to regular analysis to determine whether they continue to meet the needs of buyers in every respect or whether comprehensive or partial optimisations are necessary.
intervista supports you in selecting the right methods in product and price research. With our many years of expertise, we design a study tailored to your product or service and provide you with practical and implementable results including recommendations for action. In workshops, we work with you to develop new ideas and concepts.
Companies should already ask themselves during product development whether the planned product has a chance in the target market. intervista will work with you to develop the right concept for a quantitative market potential analysis, which will enable you to identify how attractive your product is (in benchmark terms), who the target group is and how it can be addressed.
New or newly designed products in particular should be subjected to a product test before launch. Depending on the type of product or service, this can be a packaging test or a name test. In addition to qualitative customer experience studies, quantitative surveys can also be used to obtain representative data.
There is a whole range of methods in the field of price research: These are various types of conjoint measurement in which purchase decision situations are simulated. This makes it possible to determine prices for overall products and individual product components. Conjoint methods are particularly suitable for more complex products where, in addition to the price, the exact design of the product is to be determined. For less complex products or products whose characteristics have already been defined, the somewhat less complex Gabor Granger and van Westendorp’s Price Sensitivity Measurement (PSM) methods are suitable. These can also be used to determine optimal prices and price thresholds.
Especially with more complex products or services, there is always the question of which characteristics a product should have in order to be attractive to customers. Probably the best-known method for determining not only the desired product characteristics but also the optimal pricing is conjoint measurement in its various versions. There are also other methods that can be used to determine the ideal combination of product characteristics, namely maximum difference scaling (MaxDiff) and the Kano model in its classic variant or the simplified variant developed by intervista.
Companies should involve their customers (from the beginning) in the process of product development and improvement. If you want to develop and improve your offer along the entire customer journey in a customer-centric way, we offer a customer experience study that accompanies the customer on his entire “journey” with the product.
Sometimes it can be useful to focus on a part of the customer journey, namely the use of the product. Here, customers can be observed directly during use or report on their experiences afterwards. This is possible for both non-digital and digital products and is called a user experience study.
We usually conduct both types of studies – customer and user experience studies – using qualitative methods. Depending on the question, various methods such as in-home tests, (online) diary studies, in-depth interviews or usability tests can be used. Sometimes, however, quantitative surveys are also useful, especially those that map the customer journey with standardised questions.
Behavioral economics is not a method in the narrower sense, but a field of research that deals with various “mistakes” that people make when making decisions, including decisions for or against a product. This plays a role in price research in particular – since, contrary to the assumption of homo economicus, people often do not perceive prices objectively due to various perceptual and decision-making distortions (biases) and therefore do not behave rationally. In order to counter such biases in product and pricing design, expertise in the research field of Behavioral Economics is required. intervista supports you in choosing the right methods in product and price research. With our many years of expertise, we design a study tailored to your product or service and provide you with practical and implementable results of our analyses, including recommendations for action. In workshops, we work with you to develop new ideas and concepts.