Pricing Strategy Studies

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• Pricing new products is perhaps one of the most complicated tasks marketers face. A good product priced too high or too low can fail. In our experience, marketers often price to market or price based on cost, neither of which guarantees a maximized consumer price.
• Using various forms of conjoint analysis, we have been able to shed new light on consumer perceptions of price for our clients. Conjoint analysis is a “trade-off” methodology in which the participants trade product attributes with price to arrive at their maximized product/price scenario. By analyzing those scenarios in aggregate, we can provide direction on price in total and by consumer segment (“discount buyers” versus “premium buyers”, “generation Y buyers” vs. “boomers”, etc.). This approach can often lead to multiple products instead of one – perhaps a basic product and a premium product.
• This approach can also be used to determine how to insert a new product into a line of existing products in a way that minimizes internal cannibalization of total company market share.
• Using conjoint analysis, we can also project share of preference in a way that, while not exactly market share, is not unrelated to market share. Thus, we can tell you how much your total share of market is likely to rise or fall with the introduction of one or more products.
• We can also use conjoint analysis to interpret the role of price and discount. Which one is more important to consumers in your category? How deep must a discount go in order to motivate a purchase? Does deep and frequent discounting undermine your brand image? We can answer all of these questions for you.

What price optimizes your product or product portfolio?