Empirical results along the way to a price elasticity test

Abstract:

It is such a difficult problem to pre-test the effects of price increases in the magazine market that attempts in this direction are made only seldom, although the problem plays a central role in marketing. The common price policy in German prohibits test markets and the only other possibilities left open are either letting the customer estimate his own reaction to price changes or predicting the customers' behaviour indirectly by means of other variables. Market research has made attempts in both of these approaches. Especially GUTJAHR's model has become well known, which takes the approach of indirect findings. IVE in cooperation with the publisher Gruner & Jahr has worked on the development of a price elasticity test for some time and undertaken the attempt to check out the basic draft and to improve it step by step.

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