Finding the right price strategy for products is one of the most important tasks marketing faces today. The times when one could simply add a reasonable share to production and distribution costs and call this a “pricing strategy” are definitely over.
At IfA we offer you a range of tools that help you find the right price. Based on the tasks at hand we employ the following methods:
... provides basic information on the perceived value of a product. The method is easy to realize. Respondents are merely asked if they would purchase a product at a pre-defined price. Output (among other things) is a graph that shows a price / sales volume function. Disadvantage: focus is solely on the test product - competitors are disregarded.
… is usually recommended for new products when no clear idea of a price range exists. This method is quite easy to realize. Each respondent has to answer four questions:
PSM shows you a price range for “sure buyers” and a price range for “possible buyers”. PSM also shows the “best price” and a “suitable price” for the test product along with upper and lower margins for the price range.
… uses purchasing scenarios to explore the relationship of two factors: branded product and price. At what price are different products preferred more than others?
BPTO shows you (a) the upper price margin for a branded product; (b) which monetary differences between branded products are perceived by the respondents; (c) which “market shares” a branded product achieves at different price levels among the tested competitors.
… employs conjoint analysis to determine the best price by taking into account a wide set of features (like brand, equipment level, taste, size, additional services,…).
The result shows how much a consumer is willing to pay at max for a certain extra feature of your product. How much is a certain feature worth? Which additional costs does the target group accept as an upper limit for a certain feature? Key phrase: monetary added value.