Pricing Strategy

Product pricing is a major and vital focus of market research. The idea is not to find what consumers like, but to establish what they are willing to pay for any given product or service. Then researchers use that information to establish a price tag that is ideal for maximizing the profit for that product or service. There are four primary methods researchers use to establish this ideal price tag: Conjoint Analysis, the Brand-Price Trade-Off, the Gabor-Granger technique, and the Van Westendorp Price Sensitivity Monitor. What consumers are willing to pay is not the only consideration in pricing strategy. The market you are in and the cost of production are also important considerations in establishing optimum prices. Some items, like cars and computers, lose value almost the minute they are made. And you do not want to charge $10.00 for something that costs you $25.00 to make and market. Price models and market models are a part of pricing research that are used to estimate prime demand points and the responses of competitors in your market. All these things and more need to be considered when deciding what pricing strategy to use. aDstpK8Y
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