Research Tips

Pricing Experiments

Marketers often want to find out how much people are willing to pay for a new product or service or how sales will be affected if the price of a product or service is increased or decreased. Pricing experiments can be used to provide answers to these questions. Pricing experiments can become quite complex, however, the basic idea is to manipulate the price of a product or service and see how this influences the likelihood that people will buy it. This can be done in a survey or a real situation. For example, a retail chain might increase the price of a particular product in some stores but not in others to see how this affects sales. In this example, as in most pricing experiments, it’s important to control for non-price factors that might also affect sales.