How do you determine the ‘right price’? To avoid making a mistake with your price, it is best to study it before launching your product on the market. To do this, you can use one of the 6 methods I describe in this article.
Defining the right price for a product or service is a real challenge and one of the most complex tasks in modern marketing. This decision directly influences profitability, perceived value and the competitive positioning of a company. To support decision-makers in this crucial process, our specialised market research relies on 6 possible pricing analysis methods. Each addresses specific objectives and adapts to different business contexts, from product launches to strategic repositioning. Of course, we always provide you with personalised advice to choose the most suitable method.
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Key takeaways
- There are 6 main methodological approaches to analyse consumer price sensitivity
- Conjoint Analysis offers the most comprehensive analysis of price-feature trade-offs but is complex to implement. It requires many measurement points on the one hand and specialised analysts on the other.
- The Van Westendorp method quickly identifies acceptable price zones for new products. It is simpler to implement and has the advantage of proposing a price range. It can easily be integrated into a panel survey.
- Gabor-Granger specifically optimises revenue for subscription models
- Brand-Price Trade-Off (BPTO) measures the perceived value of brands against competitors
6 techniques to know to set the right price
Conjoint Analysis: the reference approach for understanding consumer trade-offs
This method is the most sophisticated tool for analysing purchasing behaviour. It presents respondents with different product scenarios combining price, brand, features and service level. Each attribute offers several levels, allowing the precise measurement of the impact of each variable on the purchase decision.
The approach relies on advanced statistical models that calculate the relative importance of each attribute and quantify the perceived value of each level. This analysis reveals the willingness-to-pay (WTP) for specific features and enables market share simulations based on different pricing scenarios.
Practical applications include optimising SaaS bundles, positioning new FMCG ranges or designing packaged service offers. In automotive and luxury, this method effectively evaluates the value of options and finishes. Its analytical richness makes it the tool of choice for structuring a complete offer. For example, we used it in e-commerce to test prices for different formulas with varying options.
Van Westendorp Price Sensitivity Meter: identifying the optimal price zone
This direct approach asks consumers about 4 price perception thresholds: too expensive, too cheap, expensive but acceptable, and a good deal. The cross-analysis of these responses determines the optimal price, floor price and ceiling price for a product or service.
The Van Westendorp method is recommended in product launch phases, particularly for cosmetics, beverages or technology. It effectively guides the pricing of an MVP before market launch and supports the repositioning strategies of existing offers.
Its simplicity of implementation and interpretation makes it a preferred tool for quick decisions, even if it does not capture the complex interactions between price and other product attributes.
We use the Van Westendorp method in many quantitative studies. By surveying 1000 people, we already obtain precise results. Below is the description of a project we carried out for Europcar.
Gabor-Granger method: maximising revenue through price-demand optimisation
This technique directly questions purchase intent at different price levels. Depending on the consumer’s response, the price is adjusted up or down until the maximum acceptable price is identified. This iterative approach builds a precise price-demand curve to calculate the revenue-maximising price.
Optimising SaaS and mobile app subscriptions is its preferred field. It effectively determines the optimal price for special packaging, limited editions or calibrates premium and freemium offers. Its sequential logic faithfully reflects the real purchase decision process.
This method is particularly relevant for recurring revenue business models, where revenue optimisation per user is a major issue.
Brand-Price Trade-Off (BPTO): measuring brand value against competition
This approach confronts consumers with choices between different brand-price combinations. The objective is to evaluate brand value, price sensitivity and trade-offs between awareness and pricing. This method reveals how consumers prioritise these two dimensions in their choice process.
BPTO analysis effectively compares national brands with private labels and guides the pricing positioning of new entrants against established players. In automotive, household appliances or electronics, it measures the elasticity of the brand-price relationship.
This technique is essential in competitive markets where brand differentiation plays a determining role in forming acceptable prices.
Technically, this type of study is carried out like the others via a quantitative approach. The advantage is that you will recover data that will help you measure your awareness and that of your competitors.
Price-Quality Method: analysing the perception of the price-quality ratio
This method presents respondents with options where price and quality vary simultaneously. It measures the perception of the price-quality link and identifies areas where this ratio is judged unbalanced. The analysis reveals thresholds where a price reduction could harm the qualitative perception of the product.
The positioning of high-tech ranges, smartphones or laptops particularly benefits from this approach. It analyses the perceived risk when a brand excessively lowers its prices and guides the definition of credible premium positioning.
This method is crucial for sectors where the price-quality correlation strongly influences purchasing decisions and perceived value.
Monadic Testing: evaluating price acceptability without comparative bias
Monadic testing exposes each respondent to a single version of the product, eliminating comparison biases (this is therefore what is called a “between-group” study). This approach measures price acceptability, purchase intent and perceived value in an isolated context. It therefore reflects real purchasing situations where the consumer discovers an offer without an immediate reference point.
This method is perfectly suited to price tests for new services, packaging evaluations or unprecedented formats. It often constitutes an effective pre-test before more complex studies such as Conjoint Analysis or BPTO. And given the application cases, you will have understood that it is a method to use in an FMCG context.
Its simplicity allows rapid deployments and large samples. I recommend it for its ability to offer a first validation of price acceptability before investing in more substantial and therefore more expensive methodological developments.
Comparative table of pricing study methods
| Technique | Main objective | Ideal for | Complexity |
|---|---|---|---|
| Conjoint Analysis | Arbitrages prix × attributs ; simulations marché | Structuring a complete offering | High |
| Van Westendorp | Determining an acceptable price range | Simple new products | Low |
| Gabor-Granger | Identifier le prix maximisant le CA | Subscriptions, digital products | Medium |
| Brand-Price Trade-Off (BPTO) | Measure brand value | Competitive markets | Medium |
| Price-Quality | Understand price-quality perception | Premium positioning | Medium |
| Monadic | Test price acceptability | Quick pre-tests | Low |
Choosing the method adapted to your business context
The choice of pricing analysis method depends on several factors: the complexity of the offer, the product development stage, time and budget constraints, as well as the strategic objectives pursued.
For simple product launches, Van Westendorp offers a quick and effective approach. Complex multi-attribute offers require the analytical richness of Conjoint Analysis. Subscription models benefit from Gabor-Granger’s revenue optimisation, while competitive markets require BPTO’s comparative analysis.
The combination of several methods can be relevant: a monadic test in the exploratory phase, followed by Conjoint Analysis for final optimisation. This sequential approach maximises the quality of insights while controlling methodological investments.
Frequently asked questions about pricing studies
Which method to choose for a completely new product?
For an innovative product without a market benchmark, Van Westendorp is the ideal starting point. This method quickly identifies acceptable price zones without requiring complex comparisons. A monadic test can complement this approach to validate acceptability in different segments.
How to measure the impact of a price change on sales?
Gabor-Granger answers this problem precisely by building a price-demand curve. This method quantifies price elasticity and simulates the impact of different pricing scenarios on volume and revenue. It effectively guides price adjustment decisions.
Can several methods be combined in the same study?
Absolutely. This hybrid approach enriches the understanding of consumer behaviour. For example, Van Westendorp can define the price boundaries, then Conjoint Analysis optimises positioning within this range. This combination maximises the robustness of strategic recommendations.
What sample size to plan for these studies?
Samples vary according to the method: 200-300 respondents are sufficient for Van Westendorp or Gabor-Granger, while Conjoint Analysis requires a minimum of 300-500 respondents. Result segmentation may require larger samples to maintain statistical significance. The sample size question is one of the most frequently asked by our clients. To be sure to leave all methodological doors open, I recommend N=500 minimum and ideally N=1000. In B2B, N=500 is already a challenge (even though we have done B2B studies with N=2900 across several countries). In B2C, N=1000 generally poses no problem.
How to integrate competition into pricing analysis?
Brand-Price Trade-Off naturally integrates the competitive dimension by directly confronting brands. Conjoint Analysis can also include competitors’ offers as alternatives in choice scenarios. This comparative approach reveals competitive advantages and pricing vulnerabilities.
