Business Information,
Sociological and Marketig Research Center

Pricing tests

Pricing test is one of the easiest and effective methods of pricing research. Main idea of pricing test is to model maximally real market situation, when respondent has a choice in selecting of one product his everyday life. In comparison with real situation prices are set depending on interest of the researcher and objectives he has. However, difference between real prices and testing ones should not be great as it can have bad impact on the reality.

Advantages of pricing test:

• Rapid execution of the field and data processing;
• Data observances.

Difficulties:

• Need to find a premise facing all requirements for research (location, first floor, big rooms, etc);
• Need to exclude a group of consumers that cannot and don’t want to determine the price limit they will buy the product. Such a group of respondents can significantly change test results.
• Need to work with a great number of photo materials and pictures.

Main stages of pricing test

1. Determination of testing products group

As study objects in pricing test could be used different types and groups of products. Main requirement is to correspondent to the selected criteria. For example, when we want to test pricing potential of cleaning powder so research can be done in accordance with the following cleaning detergents: powders, pastes, gels, liquids, etc. for researching of respondents’ preferences regarding types of cleaning detergents and the level of readiness to pay this or that price for this very powder. In case that researcher should evaluate preferences and pricing potential of exact brands powders so we need to study brands of cleaning powders. In this case all testing brands should be familiar to respondents; that’s why in order to determine groups of testing brands it’s often used results of previous consumer researches or making assortment research in the stores.

2. Determination of tasks

It should be determine precise tasks of the test. From standard pricing test we can get answers to the following questions:

• What product or brand respondents prefer?
• Why respondents prefer this or that product?
• What price are they eager to pay for the preferable product?
• At what price they will refuse to buy the product?
• To what product respondents will exchange the expensive product?
• Why they prefer this type or brand?
• Who is the most active consumer of the product, what are their social and demographic characteristics?

Pls. pay attention that we got information not only about price, but also about preferences and motivation of respondents concerning types and brands of the research products. If the questionnaire is made in a write way and the sample was selected well too, so it’s possible to understand exact optimum prices, reserves for growing the price or vise versa for how much the real price is higher that respondents are ready to pay.

3. Field arrangement

In order to conduct standard price test there are necessary the following attributes:

• Big with furniture premise located in an active region of the city, first or second floor;
• A few recruiters;
• A few interviewers;
• Photo materials and pictures: packages or pictures of testing materials. If we test products (snacks, chips, pistachios, etc) so it would be better to put it into plates in order to complicate identifying of the brand, as individual brand preferences could impact on the respondents’ answers. If we test brands, for instance chips, so it would be better all chips to be the same tasting type. Again, that’s for respondents’ tasting preferences will not impact on their opinions;
• Set of testing prices.

It should be taken into consideration that whilst of conducting both hall-tests and pricing tests respondents could be different: weak and strong. That’s why recruiters’ and interviewers’ trainings should be the same, in order if interviewers couldn’t ask a great number of respondents, so recruiters could assist them and vise versa. It would be even better if recruiters and interviewers will shift every 2 hours.

Whilst of testing respondents are presented a set of products with prices that would be minimal for the first choice. One of the products is a testing one. Prices will grow only for this product until respondent will refuse to buy it. In this case interviewer will fix the price at what respondent changed the product and note a brand or product respondent preferred to the testing one. In case when respondent change the product at a minimal price, the interviewer starts to test another brand or product.

Monitoring of the respondents’ selection and questionnaires administration should be done “at the place” as in pricing tests it’s usually no chance to clarify or check data given by respondents due to the contact data absence.

Despite of the mentioned pricing test there are a number of more complicated methods allowing to make more completed and deep price analysis, for instance, BPTO (Brand Price Trade Off). Whilst of this method we can change price not only for one brand or product but for everything at once. As far as specific products and services are concerned BISAM Central Asia can propose special and exclusive research methods.

Pricing tests can be done independently and as a part of complex marketing researches.

We would be glad to assist you in your ideas of optimum price to be the same like consumers’ ones.

Tatyana Zaritovskaya

Projects manager