All about pricing market research is to find the price compromise on specific market segment. It required to be one of the component of any broad marketing strategy. Large mistake is made very often when marketers concentrate only on the customers sensitivity for any specific price by evolving conjoint analyses only for this strategic approach.

In fact pricing market research is a multidimensional study that includes conjoint or price ladder research, however, there should be also the competitive, branding and local cultural context (prepared by combination of desk research and e.g. virtual observations specifically for this exercise) studies, implemented within this approach.

As on the other part of our website we focus on mentioned above research programs components, as branding assessment, competition scans etc., in this part we aim to present how we understand and usually conduct the effective pricing research by itself.

Please find below the significant elements of pricing research:

Price ladder:

Main features:

• Respondent is exposed to a single procedure in order to set the price;
• Respondent gives purchase likelihood rating;
• Respondent proposes new price:

For favourable higher price;

For unfavourable lover price;

This process is repeated by using:

Set of prices;

Set of trade off grids;

Rotated monadic design:

Main features:

In front of one single respondent there is exposition of single product at set price.

However:

• Different subgroups of respondents are exposed to different prices;
• One set of price is shown to each group;
• Number of subgroups = number of tested prices;

Like in previous situation respondents give purchase likelihood rating.

PSM tests:

Features:

• All the questions examining pricing drivers are focused on single product presented and described by using visuals;
• Research objectives are to determine acceptable price ranges as well as respondents approval of different price level rates;
• Assessment is based on perceived product value and relation to its principle. Therefore the result should be analysed in the context of product category.

Measurements:

Usually this type of studies have declarative character where the following measurements are consider regarding to price:

• Too cheap to believe on its quality;
• Cheap;
• Expensive but still possible to purchase (e.g. affordable);
• Too expensive to consider any purchase;

Advantages of PSM analyses:

• Relatively inexpensive;
• imple questionnaire design;
• Small sample required;
• CATI conduct possible;

Conjoint research and analyses

The core of any conjoint research and analysis is understanding how people used to make choices between products/services and a combination of product/services specific features. This is vital for any business considering some design of new products or services where the key element is better understanding and meeting customers’ underlying needs.

For better understanding this type of research you need to be able to describe what you do actually for business in terms of attributes and levels where you can precise observe what is being traded off. So in general the scope of Conjoint research and analysis techniques are based on the specific attributes and features assessment.

Please find below the specific elements of Conjoint insights:

Adaptive Conjoint Analysis (ACA)

Since its launch in 1985, ACA has been reported to be the most popular conjoint software tool in Europe, and we believe it shares the same status elsewhere. ACA is user-friendly for the analyst and respondent alike. But ACA is not the best approach for every situation.

ACA’s main advantage is its ability to measure more attributes than is possible with traditional full-profile conjoint. In ACA, respondents do not evaluate all attributes at the same time, which helps solve the problem of "information overload" that plagues many full-profile studies.

Choice-Based Conjoint (CBC)

One of the most exciting recent innovations in conjoint research is the introduction of Choice-Based Conjoint. CBC interviews closely mimic the purchase process. Instead of rating or ranking product concepts, respondents are shown a set of products on the screen (in full-profiles) and asked to indicate which one they would purchase. As in the real world, respondents can decline to purchase in a CBC interview by choosing "None." If the aim of conjoint research is to predict product or service choices, it is natural to use data resulting from choices.

Conjoint is usually used for pricing research, where this technique is the most usable. However it might be also i.e. for examination the duration time of contract vs. other attributes of contract. Now Choice Based Conjoint are also stimulated by the most innovative virtual shopping tools. Please refer to the appropriate section of our website or contact us directly if you wish to have more information.

Conjoint research advantages:

• Allows to study influence of products’ attributes on customer preferences in any study situation when the product is described by multiple sources and characteristics;
• Allows to gather real live and real situational attitudes of respondents;
• Allows to re-scale the conjoint for different types of respondents’ reactions;
• Allows to provide highly reliable comparison analyses;

Conjoint research limitations:

• Equal treatment of all dimensions and measurements could end up with a little bit out of the real life outcomes;
• Mostly used conjoint software offer linear dependence model that flatten the analyses – however if you expect to flatten your outcomes only to price measurement that compromise your expectations;
• Provide presumptions of rationale behaviour of any respondent;

In general if you consider conjoint for one or many Eastern European countries, it is highly advisable to have a in depth consultation first in order to check out whether this type of study does make sense.