Market Research

The process of identifying your potential customers DMUs and your market segments and then formulating a targeted strategy is called market research. The price for a product or a service is one of the important P’s in the marketing mix. Deciding on a price is vital as that price needs to cover costs for the company, it has to be high enough to cover the expenses of the product but cannot be too high that customers will not want to pay for it. There are many market research techniques that help determine the best price point for any given product.
There are a few different strategies one can follow during their research in determining the cost of a product. One of the common strategies followed is the – Van Westendorp or the Price Sensitivity Meter.This strategy reports what the customers expectation of the price will be. The process is such that the person responding is presented with different questions to determine the value of the product, weather it is too cheap, cheap, expensive or too expensive. These prices are then plotted on a graph and the area between is used to determine the correct range for the price. (Stewart, 2015)
This method assumed that the customer know the current market situation. It is best to use this method along with another strategy like the Gabor Granger, conjoint or Monodic price test. A pricing strategy should never be done in a vacuum. In the event that you have contenders or substitutes, inquire about their estimating. You completely need to comprehend what desires your clients may have about estimating in your item category.

Answer the following;

Ask a probing question, substantiated with additional background information, evidence or research.
Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.
Offer and support an alternative perspective using readings from the classroom or from your own research.
Validate an idea with your own experience and additional research.
Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.

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