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Webinar Turn pricing perceptions into decisions with Van Westendorp and Gabor-Granger modeling
  • John Oppenhimer, Research & Community Manager QuestionPro
Overview

Some say that understanding customers’ evident willingness to pay for products and services is considered the most important form of market research you can conduct. With that said, many researchers and business people worry that the products and services they sell to their customers might be too expensive or even too cheap. Additionally, many don’t even know what the price elasticity of the items that they sell is. How would you be able to interpret these different dimensions to have the actual value of your products and services come full circle, and to do so without just simply asking your audience to guess a price?

Join John Oppenhimer, as he talks with about the power of using Van Westendorp and Gabor-Granger analysis as part of your market research. This webinar will include what each research technique does and when to apply either exercise. You can also understand their advantages and disadvantages, and examples of how each method helps to draw a definitive conclusion. You can use this pricing research to set the course for the future of a product, and even a company.

Takeaways
  • doneFiner nuances of conducting efficient pricing research
  • doneVan Westendorp vs. Gabor-Granger, and which is the right method for you?
  • doneSet up in QuestionPro and data interpretation
  • doneExamples of brands using this effectively
Presentation

Transcript

Speaker: John Oppenhimer, Market Researcher & Community Manager, QuestionPro

Top questions & answers from this webinar
Q: Can you add to this graph where competitive products sit price-wise? (Van Westendorp)

Answer: It’s not common to do that, but you can manually mark the price points for competitors on the graph yourself. Something important to know about Van Westendorp is that it doesn’t compare directly to competitors. The main purpose of the exercise is to evaluate how customers perceive the quality of a new product (typically, as opposed to an existing product) by answering with price points for the four questions. The data will visually provide you with a product’s price elasticity and acceptable price ranges in the case that you need to adjust the price to compete with competitor brands.

Q: Can you give a sense of what sample size is appropriate?

Answer: For using either Gabor Granger or Van Westendorp, it’s best to have at least 100 completes, unless you intend on comparing data between different segments/audiences, then you’ll want to have at least 100 completes per segment. (E.g If you want to run a study and compare on 2 different audiences, then you’ll need at least 200 completes. If you plan on comparing across four different age ranges, you’ll need to have at least 400 completes).

Q: When you show competitors with the product being tested will you show respondents their price and give them a general range of the category?

Answer: Absolutely - when you’re evaluating your product by presenting it in a competitive environment, you want the respondents to access competitor products as well as product price as if they are shopping online or in-store and having to make realistic purchase decisions.

Q: Is there a general rule of thumb for excluding outliers in Van Westendorp Pricing?

Answer: Nothing that is different from methods used for any other survey. Checking for speeders and straightliners (ex: respondents who select the same column response option in a single or multi-select matrix question.

Q: Which method this is more preferred for assessing Line Extension potential pricing wise?

Answer: For product extensions or prodigy products, you’re more often than not better off using Gabor Granger instead of Van Westendorp. With Van Westendorp you’re determining acceptable prices for a new product, whereas with Gabor Granger, because a product is part of an extension line, you already have a sense of the price range and it’s a matter of knowing at what price to set it so that most respondents would purchase at that price, and would maximize sales and ROI.