Research Services

Pricing

Strategic pricing support at National Analysts Worldwide is characterized by:

Acknowledged leadership in designing and implementing price sensitivity research that takes proper account of the market environment when deciding when and what to ask of customers, how to go about it, and how much to rely on customer price "permission" after all. (To see some of our publications on price sensitivity measurement, click here.)
Powerful decision support and price optimization applications, including pricing simulators, designed to help marketers formulate their pricing strategies.
World-class analytic capabilities for mining existing sales data to discern historical price sensitivities, as well as extensive experience assisting clients in the design, implementation, and interpretation of in-market pricing tests.

Pricing Sensitivity Research

Pricing is an especially challenging market research arena because the topic is an emotionally-charged one for buyers. To achieve meaningful insight, we need to maximize candor and minimize bias by presenting pricing scenarios in ways that are as contextually realistic as possible. Unless we avoid sensitizing respondents to the research objective, we run the risk that they will respond to price propositions in ways that are guarded or exaggerated, producing unreliable price models.

With these considerations squarely in view, National Analysts Worldwide has developed a suite of pricing research capabilities that accommodate a range of market environments and products, including new technologies. Key elements of our pricing research service include:

Exploration of available historic sales data that exists for clients' existing products (or services) to glean insights regarding the impact of past pricing changes
Exploratory research to assess potential price points and pricing latitudes (especially critical for new product introductions)
Quantitative price evaluation research, using either monadic (single-exposure) evaluations or comparative assessment evaluations that can incorporate laddering techniques or more elaborate conjoint-based choice modeling
Development of models and simulators to generate price sensitivity estimates and corresponding revenue forecasts under varying scenarios.

Decisions regarding the specific methodologies to employ must reflect the product itself (type, stage of market development, history, etc.), the range of prices under consideration, the market size and structure and the historical context. Experience and flexibility in applying these various pricing research techniques, properly calibrated for overstatement, are critical to ensure that results are reliable and the interpretations are market-appropriate. (For a detailed paper on price sensitivity measurement, click here.)

In-Market Price Testing

While conventional market research can produce valuable insight on the likely response to pricing strategies, empirical market-based information derived from actual price manipulations and purchase decisions can add conviction to these decisions.

Where market and business conditions allow, we work with clients to glean significant additional insights through the design, analysis, and interpretation of in-market pricing tests. We review existing sales channels and processes to identify market opportunities that are conducive to price testing and then design a statistically robust matrix of test scenarios for implementation. These might include temporary sales or discounts, changes in the price of specific products within a client's portfolio designed to better understand cross-product elasticities, or more subtle price movements over a defined timeframe.

Once the in-market test data are gathered, extensive analysis is conducted to determine the impact of price movements on product and portfolio sales. Modeling is used to develop price response curves for forecasting sales impacts and evaluating net profitability implications. Where feasible, data on competitor response patterns are also collected and used to assess overall pricing dynamics present in the marketplace.

When performed in conjunction with more conventional types of price sensitivity research and data mining, in-market price testing supports a powerful, comprehensive framework for pricing strategy bolstered by the empirical reliability of actual real-world outcomes.

Decision Support and Price Optimization Applications

National Analysts Worldwide creates pricing simulators that are powerful tools for predicting market reactions to changes in price and pricing structure for existing products and new products, including innovations with dramatically new price-value implications. Built on the foundation of either price sensitivity research data or the results of extensive sales data analysis, these market simulators allow users to specify pricing scenarios and estimate the corresponding sales revenues, share, penetration, and profitability.

The goal of pricing strategy research is often to understand the highest price premium that a product or brand can sustain, or to determine the price points that will maximize revenue or profitability. Price optimization applications (built on pricing simulator platforms) embed the model with additional analytic capabilities to support profit-maximization goals (or other defined objectives) without requiring extensive trial-and-error testing.

Pricing simulators and optimizers can be developed as "stand-alone" applications for evaluating pricing strategies, or can be integrated with product configuration research to help product developers determine the optimal combinations of product features and pricing.

For more information on National Analysts Worldwide, please e-mail us or call (215) 496-6800.