PRICING RESEARCH & VALUE Research
Pricing Research & Value Research can help you understand the value of the product and how performance on key product attributes can change perceived value, hereby providing valuable guidance not just on price but also on product design or segmentation.
In fact, Value Measurement still proves a key challenge for most companies, and it is not surprising. First because the notion of Value itself is complex. Value can be ‘rational’ or ‘emotional’, as illustrated below
And ‘Value is (very much) in the eyes of the beholder’ - it will vary by client based on his characteristics & priorities… So measuring Value is complex and requires specific technics & methodologies. Over time a fairly large numbers of approaches have been developed. Not all perform as well. Indeed, a number of methodologies have now emerged as clearly superior whilst others ‘do not really deliver reliable results. Amongst the most powerful methods: Economic Value to customer’ appears best for the measurement of Rational Value, Transaction (statistical) analysis & win / loss for direct measurement of elasticities, whilst Choice Based Conjoint research (particularly Discrete choice) appears best to measure the ‘emotional Value’ of ‘attributes’ of the offer
Why ‘Discrete Choice Research’ Works
1. Respondents can with “buy” or “not buy,” or alternatively allocate purchases across alternatives, that’s it
- They are not in charge of price – you are, respondents control only their response
2. Tools match the realities of the market
- Other included brands available, each matched to their offerings
- It’s possible to tailor available brands by nearly any criterion
- It’s possible to include budget constraints
3. Easier for respondent to tell truth than not to
- Respondents want to be right, with choice right / wrong is possible Dishonesty creates personal discomfort they would rather avoid Even if respondents wanted to game the tool it is not clear how to
4. It’s not clear the models are about price unless price only variable
- Usually other variables also change, but even then, most
- respondents think of model as asking their market preferences
5. Allow very clear and sophisticated modeling
- Even with monadic you have the demand curve and can make clear decisions based on profit as well as constraints like share
But the good news is that is gradually becoming better and cheaper to perform, thanks to new technologies.
- Today, on line pricing research can, at a much lower cost, provide very good and precise results on Value perception & Willingness To Pay for a large range of products & services in B2B & B2C, where buyers are familiar with the offers (Face to face research will still be necessary when the client needs to see & touch the product or is not familiar with it.)
- New analytical tools & techniques have improved the robustness & precision of results & models and Decision Support Systems (DSS) can now allow easier & fuller use of study results to support on going decision making .
To ensure precision & robustness of results PriValEdge has developed a powerful proprietary methodology illustrated below
Value & Pricing Research approach - Workflowpri
Thanks to this rigorous, careful targeting & scaling of the research & Statistical & modeling expertise, Value & Pricing Research projects undertaken by PriValEdge usually result in substantial bottom line impact for our clients through optimized Price & Value positioning & targeting, supported by powerful insights provided by the research.
To facilitate on-going decision making, and to support continued pricing optimization after launch, taking into consideration market & competitive evolutions, PriValEdge provides its clients with powerful & flexible simulation / Decision Support tools such as the one illustrated below.
For help and advice on carrying out pricing research, contact us