By Andrew Dalglish - 18th December 2009
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:
Read more about our approach to business-to-business (B2B) pricing research.
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Andrew has specialised in B2B research for over a decade and co-founded Circle Research in 2006. He is a columnist for B2B Marketing Magazine, a regular contributor to Research Live and frequent speaker at leading events such as the B2B Leaders Forum, Customer Experience Live and the Social Media World Forum. Andrew is a Chartered Member of the MRS, teaches the MRS B2B research course and holds an MA in Psychology from Aberdeen University alongside an MSc in Marketing from Strathclyde University.