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Pricing & Promotions Research

Leverage sophisticated modeling or simple behavioral science principles to identify the pricing strategy or promotion tactics that can best achieve your revenue or share maximization goals.

No marketing lever is as powerful as pricing strategy and promotion tactics for driving sales or profit. But setting your price too high can cost you sales and setting it too low can lower your brand’s perceived worth. Overly aggressive promotions can leave money on the table while also putting your brand’s equity at risk.

While some of these decisions can be made with in-market A/B testing, we use carefully designed consumer surveys among current and potential customers to assess potential pricing and promotion strategies and tactics, assessing the likely impact on short-term sales and long-term equity.

Pricing and promotions research lets you:

  • Set introductory and ongoing prices
  • Assess the likely impact of raising or lower prices or running selected price promotions
  • Choose between skimming and penetration pricing strategies
  • Compare the impact of different pricing structures
  • Identify which of your product’s features people are willing to pay more for…and which they’re not

Approaches

  • Conjoint / Choice Modeling

    Machine Learning analysis of reactions to experimentally designed combinations of prices (and sometimes features), typically presented in a competitive context with consumer decision-making processes in-mind allows you to fine-tune your offering.

  • Monadic Cell Testing

    Presenting consumers with your concept at varying price points allows you to assess whether a small price change will impact demand or large change will impact perceptions of your offering’s quality or value.

  • Hybrid Testing

    Conjoint or choice modeling within monadic test cells allows you to compare the impact of going to market with very different pricing structures while optimizing your price under the winning approach.

  • Sequential Monadic or Gabor Granger Price Testing

    Showing someone multiple prices for the same product lacks the brand equity insight and non-conscious precision of monadic cell testing; but sometimes the risk of a bad decision only warrants a modest research investment.

  • Price Sensitivity Meter (Van Westendorp)

    If you want to set your price based on the quality perception you are trying to communicate, you can ask these classic four questions to guide you to the right neighborhood.

  • A/B Testing

    When run on a small scale, in-market test-and-learn approaches can be relatively low-risk and highly effective, primarily for ecommerce and loyalty promotion applications.

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