The Importance of Pricing Research

Pricing research is something no business can avoid. Sometimes this aspect of market research could be the deciding factor in whether or not your product will succeed or not. There are a few main methods to conduct pricing research such as the Gabor Granger Technique, the Price Sensitivity Measurement Approach, the Monadic Concept Testing, and the Discrete Choice Exercise. Even though all of these methods do a great job in estimating what price would be best for a product, all of them doesn’t account for a key factor when deciding the price of a product – volition.

Volition is the act of making a decision or choice. The uncertainty is the reason why a good pricing research method is so crucial. If the pricing research method is accurate, it will lead to a successful setting price of the product. Even though the mentioned four main methods all attempt to calculate or measure this uncertainty they all fail to do so. In other words, other methods are all very focused on what happens in theory, instead of the reality of how consumers behave. This is why it is important to implement a new method on top of each method, which is A/B testing. A/B testing gives researchers a chance to observe the behavior of actual consumers and will be able to give a more accurate result of the pricing research.