Best Pricing Techniques

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Choosing the Best Pricing Techniques to Address Consumer Goods Pricing Challenges CONSUMER GOODS S E CTO R

A Current Best Practices Paper

Curt Stenger
Senior Vice President, Ipsos Marketing, Consumer Goods Sector curt.stenger@ipsos.com

Research Challenge Identifying the optimal price for a new product is a critical step in the innovation process – and correcting the price of an existing product is a necessary component of successful brand management. With the wide range of pricing research techniques practiced in the industry, it is not always clear which technique best addresses the business issue at hand. This paper describes the most common methods used for consumer goods pricing research and offers guidelines on when – and when not – to use specific methods.

August 2008
© 2008, Ipsos

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Choosing the Best Pricing Techniques to Address Consumer Goods Challenges

About Ipsos Marketing
Ipsos Marketing is a leading global market research company. With unequalled expertise in Innovation and Brand Research, we help clients understand consumer behavior, develop and launch new products, and improve brand performance in their respective markets. Ipsos Marketing offers world-class solutions that help clients build their businesses throughout the new product development process – from the earliest stages of innovation through brand maturity. Our wide range of global solutions integrate quantitative and qualitative research as well as advanced modeling and forecasting techniques. Our research is supported by sector experts who specialize in Consumer Packaged Goods, Shopper and Retail, Health and Pharmaceuticals, Durable Goods, Financial Services and other industries and services. By developing a deeper understanding of your brands, consumers and marketplace, we always deliver actionable recommendations rooted in reality.

About the Author
Curt Stenger is Senior Vice President, Ipsos Marketing, Consumer Goods Sector and leads the Marketing Sciences group in the United States. With nearly 20 years of market research experience across a broad range of industries, Curt has specialized expertise in brand equity, consumer segmentation, and new product development and forecasting. Curt is particularly interested in applying non-traditional marketing research techniques to marketing problems. Curt holds a Master’s degree in statistics from the University of Chicago, an MBA from the University of Pittsburgh, and a Bachelor’s degree in economics from Northwestern University.

This Ipsos paper is protected by copyright and may not be physically reproduced without the expressed permission of the Ipsos-Insight, Inc. Subscribing organizations may extract or synthesize data or text of their choosing for internal or limited public use.

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© 2008, Ipsos

Choosing the Best Pricing Techniques to Address Consumer Goods Challenges

Introduction
Pricing research is an essential component in the innovation process as well as ongoing brand management. Because price optimization is such a significant facet of product development and management, a vast array of pricing techniques have been developed and continue to evolve. With so many techniques available, it is not always clear which technique best addresses the business issue at hand. Yet, it is imperative that the most appropriate technique is chosen to ensure the right balance of depth of research required and research efficiency. The two most common ways of understanding pricing decisions is through existing category management systems and through primary survey research. An investigation of the pricing activity in existing categories is frequently the first step in understanding the demand-side of a pricing decision. This information is often enough to make decisions for existing products and traditional line extensions in well-developed product categories. Survey research approaches provide...
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