How to set prices Brands, Media and Money The emphasis in marketing analytics is frequently on sales - but it should be on profit. Which comes from price as well as sales. How should you set price? Suppose you make your brand more preferable – how much could you charge for this? Conjoint research can work out your price position versus your competitors - as in the LCD TV chart top right. This data can then be built into “what-if” models that calculate the maximum profit point for your brand If you plot out individual “willingness to pay” - as in the second graph opposite - you can often find powerful segmentation information. In this apparel case there are 2 distinct groups: price insensitive fashionistas and the rest of us. Arguably this calls for two distinct marketing strategies. Achievable price premia often vary significantly by subgroup. Perhaps you need to work out the effect of changing the product offer?  Modelling conjoint output can show the interactive effects of price, feature and competition - as in the confectionery example opposite. Here you can see that the pack contents effect declines with price. In general sensitivity to price is higher than sensitivity to volume. Finally, maybe it is price perception rather than the actual price that drives your market? The econometric model graph at the bottom depicts a good example of this. : Promotion values Brand value Brand values Retail econometrics <<<<< Back to menu