Brand/price trade-off

Date of publication: October 26, 1987

Author: Rory P. Morgan

Abstract:

This paper concentrates on the Brand/Price Trade-Off (BPTO) modelling technique; how in the context of growing interest in price testing methods it evolved from earlier ad-hoc pricing work, and some of the problems that it helped to overcome. Since it was first used in the early 1970s, the method has become increasingly sophisticated, and adapted (largely by the author and his colleagues) to an expanding repertoire of market types, representing differing purchasing decisions by consumers. In addition to an account of the historical development of the approach, the paper also provides a description of the ’state of the art’ in terms of data collection and analysis. The paper continues by considering different types of purchasing decision in differing markets, and how the model is adapted for use in these. Finally, the paper concludes by reviewing the strengths and weaknesses of the method compared with others commonly used, and provides some suggestions for future development.

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