Setting the right price is not just about being accepted by consumers or finding a delicate balance between profit and consumer affordability. It also plays a critical role in defining a brand’s positioning, determining its market standing, and identifying which customer group it belongs to. Therefore, pricing a product requires a strategy to ensure the brand can thrive in today's competitive market. So, how do you set the right price and develop an appropriate pricing strategy? Let's decode this opportunity with market research!  

Measure and determine price sensitivity through the Price Sensitivity Meter developed by Dutch economist Peter van Westendorp in the 1970s. This tool measures consumer sensitivity to pricing and identifies the acceptable price range or optimal selling price for a product or service. Depending on positioning and market segmentation, we measure this price sensitivity among targeted consumer groups to develop an appropriate pricing strategy.  

• Too Expensive: This criterion is used to determine whether a product or service is priced too high, potentially deterring consumers.  
• Too Cheap: Not every low-priced product or service will be favored by consumers. Depending on the target customer group, we need to identify a price range that makes consumers suspicious of the quality of the product or service.  
• Expensive: What happens if consumers find a product or service expensive but are still willing to pay? This is the price range where consumers may hesitate, yet the quality of the product or service might make them consider it.  
• Cheap: This is the price range where customers are happy and willing to accept because it is affordable relative to their financial capacity for the product or service, yet it doesn’t make them feel like they are compromising on quality.  

Based on the information above, market research analysis tools will determine the optimal price point where consumers feel most justified and are most likely to purchase. It also identifies the expected price point where consumers hope the product will be sold. To avoid risks associated with pricing, this analysis also identifies price points that could make consumers doubt the quality or find the price too high, becoming a barrier. Market research's price sensitivity scale is a key factor in helping businesses devise smart pricing strategies. It not only reduces business risks but also maintains a firm market position and paves the way for development opportunities.  

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