We are currently experiencing moments in which brands are modifying their marketing mix to adapt...
Analytics vs Research. How to drive towards Pricing Strategy?
The boom in analytics leads us to think that exploring historical data can be a viable roadmap to structuring an efficient pricing strategy. On the other hand, market research suggests that, given the changes taking place, it is necessary to study the pricing strategy from the consumer's standpoint, since in historical data we do not have the same competitors, SKUs or settings in the present as in the future. Which path to choose?
In this blog, we want to share some experiences, pros and cons of both approaches and to do so the table below may help:
|What’s the approach?||
|What method to implement?||
Optical price study
Optimal price study
It is essential to recognize the virtues of each approach:
- Conjoint: It allows us to analyze the consumer's response to the pricing strategy and to explore the consumer's "trade off". This makes it easier to analyze the impact of our movements on the competition and vice versa. It also allows us to issue short-term data that can be used to simulate the strategy in the future.
- Analytics: It allows us to analyze the volatility of price indicators, including the point-slope elasticity. With this historical volatility, the conjoint data can be fed into the future, providing a 360° view of the price.
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