What is the purpose of price research?
What price should you set for a (new) product so that it can survive in the market? How do price increases affect the market share and sales of a product?
Alongside a product's characteristics, price is the crucial factor in achieving any kind of demand. To move into the profit zone with a product, you need to set the right price.
What possibilities for price research does intervista offer?
The establishment of prices frequently takes place in combination with desk research, which involves looking at the product costs as well as competitors’ prices. In many cases, the customer’s willingness to pay is not taken into account here. In order to determine the optimum price, however, it is essential to know the customer’s willingness to pay and the demand that arises with a certain set price (price-sales function).
intervista supports you in identifying the optimum price. We have substantial expertise in methods for determining willingness to pay, and to do so use both direct and indirect methods of customer questioning.
Below, you will find a selection of important processes.
The conjoint processes permit a simulation of purchase decision situations. Here, the prices for complex products and use values for the individual components can be determined. The evaluation offers the opportunity to cost market simulations and to demonstrate which product configurations have the best chances on the market or even to what extent new products can oust products already established on the market.
Gabor Granger Model
The Gabor Granger model for identifying the optimum price of a product is suitable under two specific conditions:
Your company already has firm ideas about the price of the product.
It can be assumed that the target group has only vague ideas about an adequate price for the product. This can be the case, for example, with newly introduced products, or with products that are purchased very rarely.
In contrast to the Price Sensitivity Meter from Van Westendorp as described below, with the Gabor Granger model, various price points are established and the respondents say whether they would buy the product presented at the relevant price. If the start price is not accepted, then the price is reduced until a price is accepted or until the minimum price point has been reached.
Van Westendorp: Price Sensitivity Meter
The Price Sensitivity Meter (PSM) was developed by the Dutch economist Van Westendorp
The PSM is most suitable for the determination of the price bracket of new products and services. Whilst the PSM can be used in early phases of product development in particular, to reveal price thresholds and to check whether there are enough potential buyers in the targeted price segment, it is somewhat less suitable for precise price recommendations.
The aim of the PSM is to use four questions to determine the acceptable price bracket and eventually to identify an optimum price.