How can you conduct pricing research that accurately reflects your market?

Nowadays, people know the price of everything and the value of nothing. In the fast-paced competitive world, there is cut throat competition on pricing. Offers and discounts are everywhere. Remember, low prices do not ensure sales; neither profitability. Low prices can be beneficial for a short term to create awareness but in long term will wipe out profits. Do a deeper dig in USPs and value proposition provided by your company compared to competition - quality, genuinity, faster delivery, easy returns, loyalty points, etc. What is that your company offers different - friendly and no waiting customer support? It can go a long way to create value proposition that customers will be more than willing to pay more.

Finding the value proposition in pricing research involves understanding what makes your product or service unique and valuable to customers. Things you need to do: - Understand Your Target Audience: Identify your target customer segments and gather data on their needs, preferences, and pain points. - Competitive Analysis: Research your competitors to see what they offer and at what price. Identify gaps or opportunities in the market. - Features and Benefits: List the features and benefits of your product or service and understand how these features address customer needs or pain points. - Customer Surveys and Feedback: Conduct surveys or interviews to gather direct feedback from customers.

Studying the following : 1. Who you are ? 2. What you are selling/providing ? 3. To whom you are selling ? 4. How unique you are ? 5. How much value you add to customers ?

Price defines value. Whether it should not, it does. Case in point are all of the companies who continuously win market share without having the best product. When setting prices across various businesses, I’ve found it helpful to consider these steps/points: 1. Pricing is a quality indicator 2. Who are your current buyers 3. Who are your future buyers 4. How do your buyers buy from you 5. How can we motivate our price (product/sales)

Value plus cost determines the price The additions are there just for profit aspect. That addition is what pays for the little extra luxury

Pricing is the only element in the marketing mix that produces revenue; the other elements produce costs. So exercise extreme caution. Follow a pricing strategy as per your business objective. High quality product priced low - market penetration. High quality product, priced high - market exclusivity. Again pricing objective should not be broad. It should be niche towards a product category/sub-category OR applicable to a few products only. The pricing objective should be looked as a hook for shoppers' to perceive your brand as a whole - economy or premium. Different pricing objectives to be set for different set of buyers and their buying preferences.

This is overlooked more often than I care to admit. I’ve seen so many businesses price strictly out of gaining the best margin possible. Pricing is marketing, among other things, and should be treated with care. Those go strategically approach their pricing model, looking at long term vision AND profitability will win every time.

Aqui mora uma armadilha perigosa: a partir do momento que se define um objetivo de pre?os que entrega a proposta de valor estabelecida, deve - se seguir esse plano com disciplina e sem tenta??es de desvios para cumprir metas de curto prazo. é parte do processo colocar o plano conforme o desenhado em prática, acompanhar seu desenvolvimento e fazer as corre??es de rota, mas sempre tendo como premissa básica o alinhamento do objetivo de pre?os a proposta de valor.

Pricing isn't merely a means to cover expenses and generate profits; it's a powerful tool for marketing and sales. Your pricing strategy communicates a message to your audience about the value you provide. It influences the perception of your brand and the quality of your offerings. A well-considered pricing strategy can evoke emotions, such as trust, exclusivity, or affordability, and can guide consumers' decisions. Therefore, smart pricing is as much about psychology and positioning as it is about arithmetic. By utilizing pricing as a strategic marketing and sales tool, you can amplify your brand's appeal and drive customer engagement, resulting in sustainable business growth.

Choosing a pricing objective is more than a tactical decision; it's a reflection of your brand's values and market position. Whether aiming for profit maximization, increased market share, customer loyalty, or social impact, your objective should resonate with your core business ethos. For instance, a low-price strategy for market penetration can be effective but requires balancing cost management and value perception. It's not just about being affordable; it's about being perceived as valuable for the price. Similarly, a high-price strategy for premium positioning demands that the quality and customer experience justify the cost, reinforcing the exclusivity and superiority of the brand.

The process of choosing the right pricing method for products or services depends on various factors, like the business goals, the competitive landscape, and understanding of customer value and etc. Let's take a look at some of the most common pricing methods: - Value-Based Pricing - Cost-Plus Pricing - Competitive Pricing - Dynamic Pricing - Skimming or Penetration Pricing - Freemium or Subscription Pricing - Psychological Pricing - Test and Iterate - Regulatory and Ethical Considerations

Some of the methods are: - Choice-based conjoint analysis: Customers choose their preferred option from different features and prices. You can test different scenarios and estimate market share and profitability. - Van Westendorp: Customers answer four questions about the price of a product. You can find the optimal price range and the price points that are too cheap, too expensive, or just right. - Competitor-based pricing: set your price based on what your competitors charge.You can position the product in the market to attract customers who want the best value or quality. - Value-based: set your price based on the value of your product to your customers. You can capture the maximum value and increase customer loyalty and satisfaction.

O importante aqui é que algumas perspectivas n?o sejam perdidas quando da escolha do método de precifica??o: cenário competitivo, compromissos financeiros da empresa e equilíbrio da proposta de valor do produto/ servi?o com o pre?o definido. Fala - se cada vez mais em precifica??o baseada em valor em detrimento da cost based. O cuidado aqui é na jornada de transi??o de um método para o outro, pois para valor deve - se ter um entendimento bastante importante da rela??o do produto/ servi?o - consumidor/ cliente.

There are different ways to set your price based on different sources of information: cost-based, competition-based, or value-based. To accurately determine the best pricing method for your product, a deep understanding of your audience is paramount. You must grasp not only the demographics and psychographics of your customers but also the value they seek from your product or service. Are they driven by affordability, comfort, or emotions, such as the desire to show off to their neighbor, or the need to belong to a selected group of creative people? On understanding these fundamental insights about your customers lies the key to successfully selecting the right pricing method.

Most important steps for pricing research: 1. Define Your Objectives: -Clearly outline your research goals and what specific pricing insights you aim to gain. 2. Identify Your Target Audience: -Determine the demographics and characteristics of the people who are most likely to buy. 3. Choose Research Methods: -Select the appropriate research methods, such as surveys, interviews, focus groups, and etc. 4. Develop a Research Questionnaire or Script: -Create questions or discussion points that will help you gather data about pricing perceptions. 5. Collect Data: -Implement your chosen research methods to collect data from your target audience. 6. Analyze Data: - Examine the data collected to identify trends, patterns, and etc

Price is the willingness of a customer to pay. People don't buy products; they buy experiences. Price is a perception of quality. Conduct thorough research before setting a price. Increase/decrease in price if perceived negatively, can have detrimental impacts. Use tools for competitors' pricing to precisely set your price point. Remember, it is not always advisable to set a lower price than your competitor. Evaluate what value addition your product can provide. Use price research tools like Wiser, Google, Merchant Center, Prisync, etc. Bundle your products to create an effective pricing policy. Research on consumer behavior, their buying patterns and overall demand can be vital.

In a recent project, we employed a combination of surveys and conjoint analysis to understand customer preferences and price sensitivity. This allowed us to identify the sweet spot where customers perceived the value of the product, resulting in increased sales and customer satisfaction. The experience highlighted that pricing research is not a one-size-fits-all approach; customization based on research objectives and market nuances is essential for accurate reflections of market dynamics. In essence, pricing research, when tailored to specific contexts, equips businesses with the insights needed to set competitive and appealing price points.

Algumas indústrias, principalmente as de FMCG, sofrem do mal do excesso de informa??es de pre?os. S?o muitas fontes de pesquisa com diferentes métodos de coleta. Em se tratando de pricing, o importante é saber qual a pergunta que a pesquisa deve responder. A partir daí, quest?es técnicas da pesquisa como amostragem, periodicidade, método de coleta, etc etc s?o definidos para melhorar a acurácia da resposta. Quando se tem muitas fontes de informa??o de pre?o, importante que seus objetivos fiquem claros para todos os consumidores dessas informa??es.

Conducting pricing research within your industry and competition is crucial, as it provides valuable insights into the market dynamics and the price points your immediate competitors are offering. There are various techniques and tools you can use for pricing research, such as surveys, experiments, Gabor-Granger technique, and others. However, it's equally important to consider alternatives outside your industry or direct competition. This counterintuitive approach can yield innovative pricing strategies and fresh perspectives. This proves particularly useful when introducing new products with no direct competitors, or when companies enter new markets or industries.

You know you’re priced right when your customers complain—but buy anyway. Even a 2% pricing increase on top-selling products can have a huge impact on revenue. Positively - if the orders increase, revenue and profits multiply. Negatively - customers start falling off and worse turn to your competitor. Timely surveys, customer feedback is very essential to gauge the satisfaction levels of customers. While testing, do not test on entire product catalog, test a segment of products to determine its impact. Remember, lowering prices is easy; being able to afford to lower prices is extremely difficult.

Testing anything is important, but price is a huge influence on a consumers buying decision. The best projections can and usually will end up wrong so don’t put all your faith into what you think will happen. Test pricing and purchase models often and in various markets. Your P&L will thank you.

Testar, coletar aprendizados e aprender rapidamente. Esse é o segredo. O ideal é que todos esses testes estejam vinculados já com um simulador de p&l onde se tenha visibilidade de cenários preditivos. Desta forma, a tomada de decis?o fica amparada n?o só em fatores mercadológicos, mas com link também no bottom line da empresa.

Certainly, testing and optimizing your price is a critical component of a successful pricing strategy. One effective methodology that can be applied to pricing experiments is the Minimum Viable Product (MVP) approach popularized by Eric Ries in his book "The Lean Startup." By adopting this method, you can implement pricing changes in small, controlled batches, allowing you to assess their impact of pricing on real customers. A/B testing pricing is also a valuable tool. Testing different prices on similar groups might provide valuable insights as to how real customers react to different prices. Consider, for example, how lower prices may drive higher sales volume, while luxury items often carry hefty prices with big margins.

Pricing is a delicate subject. Companies employ whole teams dedicated to this subject alone, however, the key lies in the audience. Don't be afraid to test! On the contrary, embrace an analytical perspective, and test everything! I can say by experience, that pricing is not necessarily intuitive, and it will sometimes make no sense, but you won't find out if you don't test it. One last piece of advice: Try not to see pricing as just a means to cover for your costs and get a profit. Of course, that is in essence what your price should cover, but keep in mind that the one paying doesn't care about your costs, he just cares about the value, so value is paramount: find a way to provide such value while being profitable.

Do not increase or decrease prices just on instincts. Put thorough analysis. The moment you make a mistake in pricing, you’re eating into your reputation or your profits. Nowadays people know the price of everything and the value of nothing. Don’t fall into the irresponsible trap of setting low prices. It will kill your business cold. Low prices attract cheap customers with luxurious demands The reason it seems that price is all your customers care about is that you haven't given them anything else to care about.

In my experience working with a retail client, we conducted a survey to understand the WTP for their new line of organic apparel. The results showed that customers were willing to pay a premium for organic products, but they were also sensitive to price. By understanding the WTP of our target market, we were able to set a price that was both profitable and appealing to our customers. Understanding the customer's WTP is essential for conducting pricing research that accurately reflects your market. Without this information, you may be setting prices that are too high or too low, potentially impacting your revenue, profitability, and brand perception.