How do customers react when presented with different prices? How does their willingness-to-pay vary by segment or country, or how does it change over time, either organically or when subjected to stimuli? PriceBeam runs many studies around the world and we have collected some of the general insights and trends from willingness-to-pay studies in 2019.
Pricing is the strongest profit driver available to management. One percent improvement in price yields much higher operating profit improvement than e.g. one percent improvement in units sold, unit costs or fixed costs. Therefore, price increases should come regularly and at the very least annually. Also, almost all countries and markets have inflation, so as a minimum you should plan price increases in line with inflation. But a true price increase strategy reflects the value perceived by customers and price you as a result can harvest.
What is a Price Premium?
There are a number of different metrics one can use to evaluate brand strength. Brand recognition, likeability, willingness to recommend, readiness to purchase are some of the most popular ones. A number of studies have shown, that these cognitive and affective factors are also linked with the consumers’ willingness to pay for a brand’s products. The more appealing a brand, the more the consumer is typically willing to pay for its products. Therefore, a comparison of the willingness to pay for a brand with relevant references products or “NoName” competitors provides insights into a company’s brand strength.
We are excited to have published our latest webinar about setting prices for new products or services:
If you haven't signed up yet for our exciting webinar on the 17th, there is still time. This webinar is about how to take pricing into consideration sooner in the product development process and thus developing new products or services that better match what the market is demanding and is willing to pay for.
We are excited to announce a new PriceBeam webinar about how to take pricing into consideration sooner in the product development process and thus developing new products or services that better match what the market is demanding and is willing to pay for.
What should the price be for your existing line of products? Are customers willing to pay more than they pay today? Are consumers willing to pay more for brand extensions or entirely new products? What should be the optimal price for different markets? How do you implement the planned price increase? What would be consumers' reactions to different (price) promotions?
CPG/FMCG brand teams face a myriad of decisions related to pricing their brands and individual SKUs, be it existing or new products. Research shows that there is considerable profit improvement potential by collecting price research among consumers and applying those insights to the pricing of both individual items and across an assortment.
In this upcoming webinar we look at different methods for collecting actionable price intelligence through primary consumer research, and how to use those insights in different situations such as:
As we are approaching the last quarter of the year many companies look at increasing their prices for the coming year, in particular in B2B industries with cyclical negotiation cycles. But price increases are not always easy to implement and more than half of all price increases either fail outright or get neutralized by heavy discounting.