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What is Gabor-Granger?

The Gabor-Granger pricing model in survey research is defined as a pricing question that helps researchers determine the price elasticity of a product or service. The Gabor-Granger pricing technique was developed in the 1960s by Andre Gabor and Clive Granger, two economists.

The method is simple but effective, where respondents specify their likelihood of purchasing a product or service at different prices. Researchers use the Gabor-Granger pricing model in many product development and product research studies.

Example of Gabor-Granger in surveys

Let's take the example of a cellphone manufacturer that plans to launch a new model. To price the cellphone accurately in the market, they need to understand how much customers are willing to pay. Pricing the product too low will put doubts in the buyer's mind about the product quality, and pricing it too high will drive them away. Respondents are sequentially shown one price at a time to decide whether it's worth buying the product at that price. This enables researchers to plot the demand and revenue curve and uncover the price point that maximizes revenue.

Uses of the Gabor-Granger survey question

Here are the uses of the Gabor-Granger question in surveys.

Advantages of using Gabor-Granger in a survey

The advantages and of using Gabor-Granger in surveys are:

How to use the Gabor-Granger question in your surveys?

Explore our help file on Gabor-Granger pricing to learn how to use this feature.

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