What pricing research methods are best for new products or new targets and audience segments?

Pricing research is a critical marketing research function. Pricing research includes such tools as statistical conjoint, or trade-off analysis, with market survey research data from online surveys, personal interviews, or phone surveys. Pricing market research typically reports price elasticity of both prices and product features to allow marketing managers to simulate market conditions and product positioning to adjust perceived product value, product and brand image, and price levels. Entire marketing strategy revisions have been driven by pricing market research studies. Such marketing studies can be vital to a successful marketing plan.

Pricing research usually concentrates on customers' sensitivity to pricing. This price sensitivity is driven by many factors. First, it is driven by the nature of the market, the target within that market, the differentiation level of your product or service, and the value of your brand. If you are making decisions about the overall positioning of your brand, it is best to first tackle the positioning question. One way to think about this is to first assess your decision process and your current stage. Our discussion on the Decision Pathway may be helpful.

If you know your positioning strategy, and your decision is to better understand pricing sensitivity -- or, price elasticity -- within an existing market, there exist specific quantitative market research measurement methods which allow you to "trade-off" various product configurations with alternate price levels. Thus, "trade-off" analysis produces data from which possible price/feature combinations can be simulated producing estimates of market share under various scenarios. This technique is also known as "conjoint" analysis which comes from "considering attributes jointly."

Other methods of pricing research include market tests, in-store tests where prices can be varied store-to-store, and direct mail and internet split-cell price tests.