+44 (0) 20 7960 3802

Finding the pricing sweet spot

By Andrew Dalglish -

Perhaps unsurprisingly in the current climate, marketers are increasingly looking at price and pricing mechanisms as a means of obtaining competitive differentiation.  But there’s a lot more to price than simply being the cheapest.  It should ideally reach the optimum price point or ‘sweet spot’.  It must be perceived as fair.  But especially in today’s conditions it must clearly reflect and communicate value.

Of course there are many alternative approaches to pricing research, but we take a very straightforward view.  Price is really only determined by one thing – what the buyer is prepared to pay.

We subscribe to the view pioneered by Peter Van Westendorp, the Dutch statistician, that the price charged for a product runs on a spectrum which has two extremes.  At one end is a point below which the price is so cheap that serious concerns are raised about quality.  At the other extreme is the point at which buyers feel that the price is unfairly or prohibitively high.  But somewhere between these extremes is the optimum pricing point – that place where the buyer is comfortable.  However we believe there is an alternative and even better pricing point – one that combines customer needs, your unique brand attributes and the required product/service attributes under one big wrapper called value.

Research is absolutely fundamental to enabling businesses to develop pricing strategies; methodologies such as conjoint and derived importance can play a key role in enabling businesses to:

  • Leverage their brands to create an optimum price position
  • Maximise the real value in their products and services
  • Understand value so that this can be converted into premium pricing
  • Develop market-based pricing strategies that go beyond that elusive optimum pricing point

Read more about our approach to business-to-business (B2B) pricing research.

Enjoyed this post?  Subscribe and receive new posts by email or RSS

Connect with Andrew on Twitter or Google+

You might be interested in the following related content:

Leave a Reply

Your email address will not be published. Required fields are marked *