What are techniques used in Pricing Research?

Several well-established techniques are used in pricing research, each suited to different situations and research objectives.

Van Westendorp Price Sensitivity Monitor (PSM)

PSM asks respondents four questions about price: too cheap, cheap but acceptable, expensive but acceptable, and too expensive. The intersection points of the resulting curves identify the acceptable price range and optimal price point.

Gabor-Granger Technique

Respondents are shown the product at different price points and asked whether they would purchase at each price. The resulting demand curve shows purchase intent at each price level, enabling calculation of revenue-optimising price.

Conjoint Analysis

Respondents evaluate different product configurations, with price as one of the attributes. Statistical analysis reveals the relative importance of price versus other product features in purchase decisions.

Brand Price Trade-Off (BPTO)

Respondents choose between competing brands at different price combinations. This reveals how price changes affect brand switching behaviour.