The Gabor-Granger pricing technique is defined as a pricing question used in survey research to determine the price elasticity of products and services. Determining the price for a product or service is an essential step and one of the most important decisions for any organization. As companies need to cover their costs, it is important to price an item high enough to cover expenses, but not so high that customers won’t be willing to pay for the product. Finding your customers’ willingness to pay for services or products is considered the main reason for market research. What value do your consumers put for your product is the main question that needs to be answered. A common method to understand this is to expose people to a price and then ask if people would buy it or not—a technique commonly known as Gabor-Granger.
Starting price point is price which is shown to respondent for the first time and user will be asked if he/she is willing to buy a product at shown price. Suppose the respondent is willing to buy the product at that price, then the product is shown again, but this time with a higher price from the predetermined price list. If the respondent is not willing to get the merchandise at the primary price shown, the merchandise is shown again with a lower cost from the predetermined list. This pattern is iterated multiple times until the highest price point a respondent is willing to pay, is determined. The median price point from the predetermined price list will be set as the starting price point. Survey creator can change it based on the requirenment.
This feature is available with the following license :