How should you assess pricing?
There are a few techniques survey researchers have developed to gauge price ranges from consumers.
- Rating scales
A rating scale can be used to segment your respondents according to how price-conscious they are. Those who are more driven by other factors, such as the features or availability of a product can then be considered separately from those whose primary concern is budget.
Rating scales can also be used to gauge the acceptability of a price point, or to find out which price-points would be considered for purchase (for example, a very high price point may cause someone to ignore a product completely as it is so far out of reach.)
- Direct pricing measures
This approach asks respondents to rate the likelihood of purchase at a range of different price points. It allows researchers to define a window of price options between an upper and lower tolerance level.
- Van Westendorp pricing model
This method widens the scope to include psychological factors, asking respondents to report at what point:
- The price makes them question the product’s quality (where it’s so cheap it seems too good to be true)
- The price is inexpensive but not cheap enough to question product quality
- It is expensive, but not so much that they wouldn’t consider it
- It’s so expensive that they wouldn’t even consider it
For this method to work well, it’s important to start off with a very wide range of prices, far above and below what you would actually consider realistic.
- Conjoint analysis
Conjoint analysis is a popular technique that uses a simple choice mechanism to gather information-rich answers from your respondents.
A conjoint survey question will include a range of options, each with a set of attributes. The attributes are weighted differently with each option, so that the respondent needs to weigh up the pros and cons and make a trade-off.
The respondent’s choice reveals how important certain attributes are relative to each other, and how preferences change when attributes are combined in a product.
This is just the start
If you’re planning a pricing study, get in touch to find out what other methods and analyses we can support.