According to a research conducted by McKinsey, a global management consulting company, if the sales size stands stable, 1% of price increase in an average company included in S&P 1500 index (this index includes several firms from small to grand companies), causes 8% of growth in the operational revenue.
In order to optimize the sales size and revenue, well-prepared pricing strategy is a must. However, most of the firms do not own a formal pricing strategy. Every company should answer this question themselves: “Do we sell our products for an optimal price that will create a maximum revenue from sales?”
About the research
Ascertaining the prices is one of the harsh duties that marketers have to overcome. If they determine the price higher than the perceived benefits of a product or a service, it is probable that they will be a loser side in the competition and eventually be deprived of their market share, however, if they determine the price lower than the perceived benefits of a product or a service, then the company will leave some money “on the table” and be eventually deprived of the maximum profit they will make in the end. Of course, a low price can stimulate an additonal demand and companies can expand their market share. But, on the other hand, this cannot be firstly construed to be true in terms of some psychological and behavioral factors, and secondly, the company can end up with a failure by retaining their market share, the quality of products and services for a long time with a low revenue. That’s why, the determined price should be equivalent to the benefit, a customer gets from the product. This ratio between pricing and perceived benefits makes the value of a brand, a product or a service more clear.
The pricing research we do offer will ceetainly help you determine the most optimal price. Our research design, analysis models and applied complex statistical techniques provide an opportunity to prepare a sustainable and competitive pricing strategy that maximizes the revenue.
The content and main benefits of the research
Pricing research, in general, encompasses the following fields:
- The evaluation of various product and service elements
- Customer value of a product (service)
- Customer value of competitors’ products
- The perceived price
- The perceived benefits
- Conscious and subconscious purchase decisions
- The evaluation of various product concepts
- Price elasticity
- Brand preference upon pricing scenarios and so on.
One of the issues that makes the value measurement highly important is that when we comprehend the value given to various elements of a product or a service, we are able to present an attractive offer that will justify any kind of increases in prices.