At Reload, we are able to tailor your business’s product and pricing strategies with the aim of developing quality price structures to attract new business and keep existing customers. It is critical in new product development that a product and pricing strategy is in place to ensure the product starts well in the marketplace.
It is important for a business to have clear product and pricing strategies in place which are aligned with their target market, their position in the market, as well as their business objectives. Product and pricing strategies not only focus on pre-existing and new product businesses but also business diversification.
The talented team at Reload can also assist in the guidance and involvement of diversification plans for your business.
There are a number of commonly used pricing models in the market, all of which can be successful depending on the type of product you have and the market you are in. Add this to your custom enquiry form and we will be in touch with information to suit your business needs. Add us to your circles on Google+ and gain access to exclusive expert insights, tutorials and much more! Survey Analytics conducted a webinar on December 13th, 2012 entitled, "How to Set Pricing Using the Van Westendorp Price Sensitivity Meter." What follows is the full text of that session.
We also SurveyPocket, which is a tablet and smartphone app for doing field data collection. Existing products, one example being Coca-Cola, are always introducing new products, and they need to determine the pricing for their new products. So as you're determining your research priorities, you need to make sure that you're not neglecting research on your pricing. The key idea for the van Westendorp method was created by Peter van Westendorp, who is a Dutch psychologist, in 1976. So going back to the prior model, let's look at what the van Westendorp model did to improve on that model.
On the high end, there's also the consideration that the product is getting to be expensive, but not so expensive that you wouldn't consider it. On the low end, a product or service can be too cheap, which connotes low quality, but then at a higher price it can be considered a bargain.
I like to think of the four questions as a meter because of the term the price sensitivity meter. The third question is what's referred to sometimes as the bargain question and the opposite of the not too expensive question. So one important distinction here is that the van Westendorp Price Sensitivity Meter assumes a rational approach to pricing. So let's take a look at how you would do research on how to price the Flying V if you were the Gibson Corporation.
So the other thing to keep in mind is that you want to make sure that the responses are validated.
So the way you analyze the data is that you plot each of these questions for the population of interest. For each of the questions, you're going to be plotting the cumulative percentage of respondents that thought that that descriptor describes the pricing for the product. You also can do a box plot of each of the four questions to visualize the data in a different way. So when you have many different products-- and my daughter is a fan of the American Girl dolls-- so theoretically the American Girl company could do iterations of this pricing research for all of their different dolls. If you're looking at a competitive situation, if you want to focus on that, or if you're not comfortable with looking at a price in isolation from the competition, then you may want to consider discrete choice conjoint or other methods. Someone said that the pricing in the van Westendorp method tends to be lower because it encourages low balling. And because there are so many nice little charts and numbers that come out of the van Westendorp method, the analysis chart can make it appear that the method is more precise than it really is. Personalize it One way to keep respondents interested in your survey is to personalize the survey for them. There are so many product and service choices out there that your customers really are looking for a great reason to be loyal to you.
In 2008, the number of things connected to the internet exceeded the number of people on Earth.
Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The rational way to raise your gross margin is to differentiate your business by redefining your company as the only player in a specific niche, instead of being just another company among larger ones. If your company is the only one that can do what you do, then you can increase your margins. Spend time on “socially connecting” activities, such as volunteering and spending time with friends. Memory is important, because it helps us take an event that happened in the past and extend its ‘worth’ into the future.
We hope that you or your designer will keep these dimensions in mind while your piece is designed. We hope you can use some of this information as you craft your marketing and mailing messages. There are many sources and resources about color and color psychology, we stumbled across this image that was a part of post. There was some great information that we hope you can use in your marketing and mailing creative. Green is the easiest color for the eyes to process, it is associated with wealth, used to encourage relaxation in stores. We are here to help you use and maximize all resources and information as you put together your mailing and marketing campaigns. To continue with our ideas about building confidence, BNET summarized an interview about building self-confidence and authority during presentations. A supporting idea is the act of physically occupying more space conveys many of the same benefits. We usually respond positively to confident speakers and find them more believable and credible. There is more scientific explanation about how and why getting people to act right away can be so powerful. An offer of a free massage right now might look a lot better than a free massage in an hour, but we’d see little difference in offers of massages at, say, 2pm or 3pm one week from now. Perhaps this helps to explain why direct mail has an immediate response spike and a very long term response. BNET shared some stories about marketing tactics that independent bookstores are using to remain successful. The Harvard Business Review’s Daily Stat summarized some findings from a Journal of Marketing article titled, the Sound of Brands. A restaurant name containing repetitive sounds puts patrons into a good mood, and they are thus more likely to order chocolate cake for dessert than fruit salad. Exposure to a brand name that has sound repetition in its phonetic structure and is spoken aloud produces positive affect, which favorably affects consumers’ brand evaluations, reactions to cross-selling, and product choice. At Reload, we conduct an extensive competitor analysis to identify your competitive advantage and optimal method to move into the market to give you the best chance of success. At Reload, we provide guidance on ensuring that all structures and strategies are aligned and working towards the same clear objectives.
Diversification is a strategy used to increase sales volume from new products in new markets. As part of diversification planning, we will explore with you opportunities for your business and look at the feasibility of these opportunities.


The price you charge your customers reflects your brand, your position in the market, your future cash flow for the business and ultimately your viability in the market.
We will take you through the key pricing models that are suited to your market and provide recommendations.
We are a company that provides DIY or do it yourself software for data collection, analysis, and visualization. Coca-Cola has its classic Coke product, and Coke Zero is one important iteration that they introduced. It's arguably the most important thing that you're going to research, because you can have the best product in the world, but if it's improperly priced you're not going to be happy with the results. He traveled from the Netherlands, where he was from, to Vienna where he presented at the ESOMAR Congress in 1976. But you really can think about it as a warning system of where are you on these four constructs, as it were, in your pricing for different segments of the population at different times and for different products. Now I will tell you that there's disagreement and there are different versions of the specific wording. At what price would you consider blank starting to get expensive so that it is not out of the question, but you would have to give some thought to buying it? Again one of many methods, but one that's proven to be quite effective and quite a regularly used tactic across lots of different industries. Let me pick one product and give you a sample of how you would use the van Westendorp Price Sensitivity Meter to research that product. Obviously the question-- the response for any particular respondent for the price at which the product is too expensive is going to be higher than their response for what price is too cheap.
It doesn't always come out as pretty as this with four intersecting lines, but it usually does. So you can see how it gets to be quite useful to distinguish among the different products and the different versions of your product.
Of course, this method is subject to the same survey error, the same measurement error, that all surveys are. If you want to go ahead and submit some questions into the GoToWebinar control panel, I will do my best to answer them.
An important concept in Marketing, it is a tool which is used for deciding what the price of the product should be and what are the factors that influnce the price of the product, etc. The article is titled, “Startup Survival: How to Get Past the 3-Year Hump,” the point being that smart marketing makes for financial success. A related predictor of happiness is how much substantive discussion a person engages in, compared to small talk. Work is not ’socially connecting’ and is generally one of the more unhappy parts of the day. Research has shown that the part of the brain responsible for feeling pleasure can be activated just by thinking about something pleasurable. Focusing on the “here and now” slows down the perceived passage of time, allowing people to feel less rushed and hurried. In general, spending time on someone else makes people feel like they have more spare time and that their future is more expansive.
Youths tend to equate happiness with excitement, but as people get older, happiness is associated with feeling peaceful. Speaking of things to think about while you design, please talk to us about postage and classification before you go to press.
The McKinsey Quarterly found a company that was selling an industrial piece of equipment with a net margin of -200%.
The example of the negative net margin occurred because an industrial-equipment manufacturer spread its costs across all products. The idea is that expansive poses (arms wide apart) practiced over a two-minute period before a presentation stimulates higher levels of testosterone, the dominance hormone, and lower levels of cortisol, the hormone associated with stress. Similarly, we work with our customers to help them use the largest format possible while respecting financial constraints to make the most confident statement. How can we help you translate your great speaking skills and presentation to your marketing and mailing? Harvard Business Review’s Daily Stat excerpted more findings about the way our brains work.
We would love to help you implement them and put together a story to tell your customers about it.
But the effect vanishes if the name represents too great a departure from linguistic norms: 80% of participants ordered cake when they were asked to imagine they were in a restaurant called Rantifanti, compared with just 30% for Ranthfanth. For example, names such as Coca-Cola, Hubba Bubba, Tutti Frutti, Jelly Belly, Kit Kat, Bits & Bites, Lululemon, and Tostitos might elicit positive feelings, especially when the names are spoken aloud.
We will assist in putting together appropriate plans and strategies to give your business the best opportunity to create additional revenue streams. If you are looking for some guidance on how to price your product and whether the price will be sustainable, we can help you put the necessary planning in place. We will also provide financial forecasting such as a break even analysis and profit projections to understand the benchmarks required to see your product succeed in your specific market. And I'm very pleased for you all to be here for this webinar called How to Set Pricing Using the van Westendorp Price Sensitivity Meter. LifeMetrix is for mobile data collection-- mobile passive data collection that is-- and Second Prism is a revolutionary system for visualizing and interacting with data on touch screen devices, such as iPads, Android tablets, and also smartphones of those two operating systems.
There are so many products out there, and I think we all know that products have been proliferating and services have been proliferating.
So whether you run a massage service or you have an accounting service, you also need to determine pricing and not just in a haphazard way, in a smart way. You have to know what your market is and where your positioning is and what kind of pricing makes sense for where you are in the market.
So pricing research is not just a one off consideration, but it's also an ongoing consideration.
The most common, I would say, way of asking about pricing in a survey for inexperienced researchers is simply to ask, what price would you be willing to pay for-- and whatever your product or service is. The second is that you're really encouraging people to low ball you, to say a lower price in the course of the survey. Well, as we know, and you'll know in your personal life that sometimes a higher price connotes higher quality.
Likewise you want to be at the maximum at the expensive level but not the too expensive level. And finally the too cheap question is, at what price would you consider blank to be priced so low that you would feel the quality couldn't be very good? But this method assumes that there's a certain level of rationality among respondents to the pricing. It has been validated across different industries for products and services and for expensive items and for low priced items. And the question says, at what price would you consider the Gibson Flying V electric guitar, A, to be so expensive that you would not consider buying it, B, to be priced so low that you would feel the quality couldn't be very good, starting to get expensive so that it is not out of the question but you would have to give some thought to buying it, and to be a great bargain for the money. So you can combine that with the van Westendorp data to determine the optimal revenue point. And so they would in theory have a nice little chart for each of the different products, for each of the different target groups, regions of the country, et cetera.
It leads with cupcakes, reserves the best merchandising space for cupcakes and displays cupcakes above the fold on its website. Aaker, a marketing professor at Stanford University’s School of Business, Melanie Rudd, a Stanford MBA student, and Wharton marketing professor Cassie Mogilner, examined 60 academic studies looking at the way people spend their time and how that affects happiness. The people that make you happiest will generally be friends, family, and romantic partners.


And we often enjoy the anticipation of something pleasurable more than the actual experience that we think is going to be so great. Young people get more happiness from spending time with interesting new acquaintances, while older people get more enjoyment from spending time with close friends and family.
Hopefully your printer will try to help you minimize your costs and maximize the amount of the sheet that will be used, so you are not paying for paper that you won’t use or waste. There may be a small alternation that you can make that will save you a large percentage in postage. This really makes sense when we compare postcards of different sizes and how they look in a mailbox. Maybe it is just the reason you have needed to mail a postcard out to your favorite customers?
Diversification allows your business to tap into additional revenue streams and opportunities within your realm of influence. I've had a good time preparing for this webinar, and I look forward to a good session and some good questions at the end.
And we allow people to do their own surveys, but we have advanced functionalities including the van Westendorp Price Sensitivity Meter, conjoint, TURF analysis, things like that that you wouldn't get in a standard package, but it's at a good price point.
Even pizza delivery-- there's another service that needs to know its pricing for the service of delivering pizzas. And of course, they have to do research on all of the different pricing for those different products. You need to be checking in on your pricing on a regular basis, and you need to have your finger on the pulse of where the market is. Even this is not quite sophisticated enough for most market researchers, and the van Westendorp method was a significant advancement over this better than basic but not quite good enough method of just asking for a high and a low price range. So on the high end, it's too expensive for someone to buy, and on the low end it's too cheap.
And so you asked the question whether it's getting expensive versus whether it's too expensive to tease out that distinction. For the too expensive question, the wording is, at what price would you consider blank to be so expensive that you would not consider buying it? And the conclusion from this is that it may be applicable more in some instances than others.
Impulse purchases not withstanding, this is not a product that you would market to the entire population in a market.
We click Add-On Modules, which is the group of questions that the van Westendorp question is within, and then you see down for the bottom there's a pre-programmed version of the van Westendorp price sensitivity question right there within Survey Analytics.
You can do programmatic validation with bounding logic, or you can do post hoc data cleaning. So again this is not exact, but it gives you a good sense of the range of where theoretically your pricing should be in.
You can take the output of the van Westendorp method and you can measure purchase intent at those different levels.
That's the point at which you're going to have the most profitability along the price line. But the aforementioned four-line chart is the standard way of analyzing van Westendorp data. And this is true of any market research method-- that when it's not used in conjunction with other techniques, it can provide a limited window onto the phenomenon you're trying to study. Their conclusions were recently summarized in a BNET post titled, “Scientifically Proven Ways to Be Happier”. If you want to increase your happiness, it’s far better to find one or two people with whom you can have a real discussion than to engage in small talk. The most common example is vacation planning, which some find more pleasurable than the vacation itself.
However, a closer examination of expenses of each product phase showed that older products cost substantially more to produce than it had expected.
By the way, if you do have questions, go ahead and submit them through the question interface on the GoToWebinar control panel, which should have appeared when you logged in. You have your technology products, innumerable numbers of different types of gadgets, smartphones, tablets, and the like.
The problem with the willingness to pay question is really two major things are wrong with it. It has subsequently been modified, and there have been some improvements on the method from the original paper. Because not that people can't afford it, but rather they infer that it is not a high quality product, or that is not a sufficient quality product. So you really need to think as a researcher about your own market and whether you can reasonably say that your audience knows enough and is rational enough about the market in order to set this pricing within these questions.
It is essentially the place on the price line that is the cheapest that you can go while maximizing all of the other factors. Some people look at the place where the too cheap and the too expensive intersect as the optimal price point. You always want to, as a researcher, triangulate in on something using multiple methods if possible. And, of course, you want to replicate the results, do it more than once, and you want to look at different methods in conjunction with the van Westendorp method. And I'm sure everyone on this call would agree that a market research approach rather than a haphazard approach is what makes sense. Unfortunately many products are not researched, but the pricing is done by trial and error. You really want to determine a range for your pricing and not just have a point estimate, as I mentioned. But the original paper was in 1976 called and "NSS Price Sensitivity Meter-- A new approach to consumer perception of price." And that's from the proceedings of the ESOMAR Congress in 1976.
Some of the best known guitarists in the world have used the Flying V, so it is a premium item. You also can customize it, but it does come in a standard format, which you'll see in a moment.
You see that it's the proportion for each price plotted against the proportion of people that agreed with that for each price.
That's why we do qualitative and quantitative-- to have different views on the same phenomena.
Well people who are pricing by trial and error are certainly not optimizing their price, and most importantly, their profitability.
People in the market that are guitar collectors or have multiple guitars, they know a lot about the market and they have definite thoughts about the guitar market. And so, not only is it unpleasant, but it's also not recommended in terms of the way to optimize your pricing. Putting your finger in the wind, going on intuition, again not recommended, yet all too common. This may be one of the things that keeps prices down unnecessarily is fear of not selling-- fear of offending people by charging too much.
You can also have just end points on the slider instead of having the categories along the way.



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