Price setting & marketing research: everything you need to know about it

This is how market research provides you with valuable information to determine the selling price of your products or services.

Setting the selling price of products or services, also known as Pricing, is a crucial procedure for companies and with a very high margin of error… If you don’t rely on market research.

In fact, a market survey can come to the aid of entrepreneurs and simply solve a problem that would lead to a delirious and probably disadvantageous situation for business.

Are you also struggling, perhaps because you are starting a business or about to launch a new product/service and don’t know what cost to define to attract consumers and outperform the competition?

As you read this article, you will find relief from your concerns and learn how market surveys help you strategically set prices.

The benefits of market research dedicated to setting the selling price of products and services.

Market analyses geared toward pricing your products or services are what you need to make informed, sound decisions without risking reputational crises, sales declines, and many other horror scenarios.

Basically, pricing informed by marketing research allows you to:

• Predict consumer response regarding the adoption of certain prices or the change in previous amounts.
• To find out, in advance or in real time, the effects that certain prices have on market demand.
• Adjusting prices to customers’ needs while avoiding the much-feared reputation crises.

Knowing this information in advance through market research allows you to predict the impact of pricing on your company’s revenues . As you can well imagine, meticulous investigation can save you from failure and benefit your ROI instead.

Read also: Qualitative market research: definition and meaning

How do you fine-tune accurate sales pricing?

In order to fine-tune a perfect price definition, it is necessary, first, to collect a large amount of data and, second, to analyze it taking into account precise variables.

Delving even further into the topic, we can tell you that market research that borders on perfection is that based on the collection and analysis of Big Data online .

This data is, precisely, public information expressed on the web by both your customers and your competitors (in fact, Pricing should preferably also include ad hoccompetitor analysis ) and product sales data in marketplaces such as Amazon.

This is spontaneous and sincere information. Words and behaviors that can suggest the perfect price for your products or services.

Pricing should always be informed by quantitative (and, if possible, qualitative) market research and be based on 6 main steps:

1. Defining the goals of the company’s Pricing strategy (e.g. pushing sales in a well-defined time period, reaching a particular market segment etc.).
2. Demand identification, i.e., target customers’ demand for the product and price perception of the product. The relationship between price and demand is analyzed by means of the demand curve.
3. Estimation of the costs of production, distribution, and sale of products so that the defined prices can ensure a profitable Return on Investment, to be determined precisely during market research.
4. Competitor analysis , so you can peek at what your competitors are doing and adopt a better strategy.
5. Determining Pricing strategy by considering one or more variables including consumer demand, estimated business costs, and competitor strategies (plus additional external factors that might influence consumers).
6. Ultimate definition of the price of the product/service based on the data analyzed and conclusions drawn about it.

The pricing strategy must also consider possible adjustments in accordance with changes in the target market, new strategies of competitors, and changes related to market demand.

When to request marketing research aimed at pricing?

Pricing strategies in marketing are useful in particular contexts, listed just below:

• The most common case, which is the launch of new products or services, even when they belong to a pre-existing line.
• The company’s expansion to the foreign market (we talk precisely about Geographic Pricing when the company decides to assess different prices based on the geographical region to which consumers belong).
• The expansion of marketing strategies to a new market segment.
• The adjustment of prices in case of discounts and promotions dedicated to particular segments (e.g. discounts for students under the age of 25).
• The implementation of new marketing strategies.
• The birth of a new company. In this case, it is necessary for pricing to be a small part of a significantly larger market search.

Pricing tends to be an ongoing process. It is not limited to a single survey but is repeated periodically according to market and business needs.

Read also: 3 reasons why you should consider quantitative market research (without neglecting qualitative research)

Do you need to define the price of your products/services?

Then all you need is ad hoc market research that allows us to analyze your target market and suggest what prices you should offer in order to add your goals.

Avoid DIY: it will lead you to make completely wrong choices!

Turn to amarket research agency that can provide you with the right answers to your marketing problems.

We correct ourselves. Don’t turn to “just any” agency. Turn to us at Central Marketing Intelligence and request a survey based on solid, irrefutable data.

Contact us now. We are at your disposal.