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Product Pricing Research

Marketor℠ is a system for improving company revenue through demand curve measurement and analysis. 

Overview 

Most executives and product managers are aware that setting the right price for a product is critical. In practice, however, the methods by which companies go about price setting are often less than optimal. IPR provides a rigorous, quantitative, and highly defendable approach to determining the optimal price range for a company's products. IPR's approach to pricing research can help companies: 

  • Measure the complete "demand curve" or the likely unit sales for a product across a range of relevant prices.
  • Estimate an optimal set of prices to maximize product (or company) revenue and profit.
  • Accurately price a product "bundle" or a complete set of prices over an entire product portfolio.
  • Identify customer segments with different price sensitivities and assist companies in thinking through potential pricing strategies to increase revenue.
The key ingredient to all of the above elements is an accurate understanding of product demand. IPR uses market surveys and economic analysis to estimate product demand at a variety of potential price points. Usually, product demand increases as prices are lowered, and product demand shrinks as prices are raised. For most companies, however, a rigorous, quantitative understanding of that pice–demand sensitivity is lacking, and their pricing decisions are often made using other means. 

IPR uses survey tools to understand a product's demand curve and answer company pricing questions. IPR creates a simulated shopping environment. A pricing simulator then helps companies estimate the likely product demand using a wide variety of potential prices. 

For example, IPR has helped numerous clients optimally price a product "bundle," as well as the separate ingredient components of that bundle. IPR shows how a bundle priced too high discourages "sell up" and generates suboptimal revenue. At the same time, IPR also shows how the prices of ingredient products set too low cannibalize the sales and higher revenue of the bundle. Only by simultaneously optimizing the price for the entire product portfolio, balancing the prices of the bundle and ingredient products, is a company able to maximize revenue and meet its goals. IPR works hand in hand with product managers, client research departments, and other company executives to answer their specific pricing questions.