In today's tough environment, the pricing decision for a new product has become more essential for future profitability and also more difficult to make. Market Research can help on two key issues, dealing with new products under development : Price acceptance - given the new product, how is the consumer going to respond to the various possible price levels? Price importance - given a range of prices and possible characteristics of a new project, which product attributes would be the best 'value for money'? Which alternative would best trade-off a high consumer price? While the problem of price acceptance can he answered by classical methods of assessment of the buying response to price, the second problem requires using the more recent tool of conjoint measurement (trade-off) approach. Our opinion is that it is wiser for a marketing company to introduce the price parameter early in the process of new product development, rather than checking the price acceptance as the very last stage before launch. A review of the classical pricing research methods and a plea in favour of the trade-off approach are illustrated with examples.
The examples in this paper are drawn from one example of 'closed universe panels' ie. Sharescale Panels, which are set up on an ad hoc basis to measure particular product fields, usually to test the effect that a new brand might have in that field. Recently, however, Sharescale Panels have been set up to determine, inter alia, optimum price levels of existing brands - making use of the unique qualities of these panels to measure the effect of price.
The evaluation of price expectations in consumer sentiment surveys is rather ambiguous. Time series in price expectations and time to buy from our continuous research in this field show that as long as prices can go up and can come down, people will try to beat higher prices of the future by buying now, and wait for lower prices in the future by postponing expenditure. Price expectations, generally speaking, can be different from price expectations of cars, houses, durables. Time to buy a house is compared with sales of houses in the late 70's. Trends, on new car sales in Holland, are related to time to buy a car in 1979 - 1982.
In product fields in which children are interested and deeply involved (like sweets), they are strongly price-conscious. Despite the fact that they finance their purchases only partly by their own pocket money and rely widely on other "resources" (e.g. extra money from parents), they are looking very carefully for "value for money". This price-consciousness is even observed when the budget at hand is higher and the child could afford to buy higher priced products. There seems to be a "frame of reference" defined by a certain price level and within this price frame a specific brand/product is chosen. Higher prices for a given product range (up-trading) is only accepted, if interest in and attractiveness of the product range itself is strong enough. Finally it is assumed that price as a variable has two functions, one as the signal for quality, the other as the economical determinator of the buying attitude. This is discussed in a few examples of product development testing.
Recent rapid inflation in Britain has led to a reappraisal of their needs by newspaper readers. This has led to considerable changes in their buying habits, and consequent marked shifts in the proportions of people who buy for different reasons. Those who are most vulnerable to price increases have fallen off at the highest rate, leading to a relative increase in the proportion of readers whose motives are less price elastic. This paper, will show how the Manchester Evening News has monitored these changes, via a continuous readership survey. It will consider the size, stability and importance of each of these different groups of readers, and show their likely development in the future.
This model, which is called PAKOM from the initials of its German name, concerns itself with the effects of price differences and indicates what influence the price policy for a product has on the level of sales, against the background of competitor product prices.
This model, which is called PAKOM from the initials of its German name, concerns itself with the effects of price differences and indicates what influence the price policy for a product has on the level of sales, against the background of competitor product prices.
In this paper we present a new technique for the measurement of price-perception in surveys. The technique is partly based on earlier research in this field but incorporates important new features. The approach is essentially psychometric. The technique is presented in detail, and a number of applications show that is works and how it works.
This paper describes how motorists in the United Kingdom reacted to a series of events following the Arabs-Israeli war of 1973. These events include petrol shortages, both threatened and actual, appeals to save fuel in the national interest, both voluntary and statutory speed restrictions, and a series of unprecedented increases in the price of petrol. By combining behavioural data from a diary panel with Public Opinion and depths research it has been possible to gain an understanding of motorists attitudes and reactions for predictive purposes. It is concluded, inter-alia, that the classical economic price elasticity would not apply to this situation, at least in the short runs. A tentative model relating information and experience to attitudes and behaviour is suggested.
A new family of methods for data analysis has been recently developed in the United States. With these methods it is possible to explain an ordinal scale (preference, choice) by means of nominal variables (characteristics of the stimuli). The basis of these methods is the research of an optimal quantification of the qualitative variables. At the end of 1974 we had the opportunity to apply them to several actual problems of marketing and media research. In the first case, the problem was to measure the consumer's reaction to price. Several brands are sharing the market of a current and rather common consumer good. It may therefore be supposed that price changes have rather important effects on the sales. In this application, the dependent variable was the consumers' preference among brands x price combinations and the independent variables were the brand and the price. The second case was a packaging problem and the third application has been done on a media problem. We can already draw first conclusions from the application of this new family of methods to actual problems.