Pricing Strategy Research

There are only three ways to increase profits – sell more, cut costs or raise prices.

The first and second pricing strategies involve considerable effort, but the last is easy – the price ticket is changed, the price list is reprinted or the sales force is told to add 5%. With costs unchanged, a 5% price rise is straight on the bottom line – what could be simpler!

We do not need an economics degree to know that there is a link between prices charged and volume sold. Customers may buy from a competitor due to a price increase, switch to a cheaper substitute or even stop buying altogether.

Pricing Strategy & Pricing Optimization: Understanding Price Against Value

The fundamentals of value revolve around the trade-off between the benefits a customer receives from a product or service and the price they will pay for it. Customers do not buy exclusively on price but are driven on value buoyed by the disparity between benefits a product/service offers and the price that is charged.

• How much will a respondent pay for an added value service/product over and above the present price? OR
• How much of a cutback in service/product requirement would necessitate a price reduction?

Pricing strategy research can help to verify pricing assumptions as well as answer the questions of where price/product trade-offs may lie, in addition to where extra value can be delivered. Pricing strategy research needs to take numerous factors into consideration such as emerging trends in the market that may alter perceptions, product inertia or even history of the marketplace (i.e. order of supplier entry into the market).

Bespoke Pricing Strategy Research

Our techniques are designed to understand the trade-offs that respondents make when selecting and acquiring products and services by using different price sensitivity models and value maps.

To learn more about how B2B International can help you, contact our Pricing Strategy Research Team.