Understanding what people value is the key to successful pricing research. Yet determining the value that your target market places on your goods and services is one of the most difficult tasks that a business-to-business marketer faces. Setting a price that is too high will clearly open the door to the competition, yet fixing a price too low and thus running the risk of leaving money on the table, is equally unappealing.
Business-to-business marketers frequently fail to find the optimum price. More often than not they charge too little, underestimating the true value of their offering. So it’s hardly surprising to learn that a tool that will help us measure value can be worth its weight in gold.
Within market research, three main tools can be employed for measuring value. Each has its own merits and is suited to different situations:
- This is a very simple approach in which the buyer is given a list of the product/service benefits. He or she is then asked to indicate the relative importance of each benefit by ‘spending’ a number of points according to which are most valued.
- The resulting points-spend gives an approximate indication of how buyers see value in the products/services they buy.
- This approach to pricing is relatively crude and unsophisticated.
- This is a long-established technique which market researchers use for assessing the value of different elements of an overall offering.
- Even with relatively simple conjoint concepts it is, however, necessary to interview at least 200 respondents to ensure an accurate result; many statisticians would insist on twice this number.
- Conjoint analysis has, therefore, some limitations for b2b researchers.
- SIMALTO is a powerful and highly recommended tool.
- It helps you to understand how your offering is valued, and can be crucial in determining value in b2b situations.