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New Modelling Software for Pricing Research
Australian research specialist Pricing Decisions has announced the launch of a proprietary technique called 'eValuator', which uses advanced choice modelling methods to understand the value that customers obtain from new and modified products.
According to the company's Web site, an analysis of the income statements of Australia's 10 largest retailers and consumers goods companies shows that a 1% increase in price could lead to a 17% increase in profits - more than would be possible by reducing overheads, increasing sales or cutting the cost of sales. Service organizations and industrial companies in Australia and the US show a similar pattern.
eValuator is specifically designed to understand the price premiums that can be extracted through new products and by modifications of existing products - it is also intended to be enjoyable to respondents, who can play around with branding, product and service benefits and watch the price rise and fall. Naturally DRNO has been given a sneak preview and spent a long time checking the price of various pain relievers [packet of 96 raspberry flavour super-strength coated capsule branded headache pills a bargain / great gift for Christmas at $43] and we'd like to confirm that it can be fun.
Each respondent completes a single task, rather than a whole series, and each is given different prices, enabling accurate measurement of how much customers will pay for each of the possible product modifications. The set of prices shown to any given respondent is determined in part by the pattern of their answers.
As a result clients get a detailed understanding of the value consumers place on different product modifications, and a precise indication of the possible price premiums they would give.
eValuator is positioned as 'the best technique for online studies' because the more entertaining approach is likely to keep respondents' attention, while many traditional choice modelling approaches are seen by respondents as burdensome and repetitive. Developed in a packaged goods environment, its creators nevertheless claim it is equally applicable in markets as diverse as financial services, utilities, local government and air travel.
To view a demonstration of eValuator, contact enquiries@pricingdecisions.com
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