When we approach marketing at its most basic level, we learn the importance of the classic four p’s: place, promotion, product and price (although today there is talk of no less than seven p’s). We will talk about the last one today. The cost to the end customer is a factor that in many cases turns out to be decisive for consumers when making their purchase choices in a rational way.
It is not for less. The price, being a quantitative attribute and comparable with other factors such as the consumer’s income, is usually considered with great attention by people. This attention increases more when we face situations that make income stagger and threats to the economy increase, such as currency devaluation and inflation.
In market research, the study of prices is not alien to us. Analyzing price elasticity is a type of analysis commonly performed by quantitative analysts. In this class of investigations, field survey teams are used to collect sufficient records of current and potential consumers. The questionnaires show the concept of the product or service and subsequently ask about prices and consumption patterns.
Among the findings of this type of study are those that we list below:
- a) Minimum acceptable price. It is the lowest value for which the consumer would acquire a good without questioning its quality.
- b) Average price. It is the value that most consumers accept as the most appropriate.
- c) Maximum acceptable price. It is the highest value for which the consumer would acquire a good without rejecting it.
- d) Coefficient of elasticity. This value indicates the nature of the relationship between demand and price of a good. If it indicates inelasticity, the price of the product affects its demand very little. This occurs with essential goods or with strong brand loyalty. If, on the contrary, this coefficient indicates elasticity, the traditional interpretation shows us that any change in the price of the good will modify its demand to some degree.
Although there is more data and information to be obtained from a price elasticity study, the data listed above is the most common. We know that in many cases the cost to the public is usually determined exclusively by the purchasing and operations areas of the companies. However, investing in market studies on the price of our offer can help us not to be left out of the market; either because they are considered too cheap or excessively expensive.
At Acertiva we have a team of analysts with experience in quantitative and qualitative price research. Thanks to our 18 years of experience, we can put our knowledge and advice at your fingertips when developing projects of this type. Write to us today so you can tell us about your needs and we can share with you how together we will write your next success story.
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