PRICING RESEARCH METHODOLOGIES

Preference Modeling - Choice-Based Conjoint (CBC)

 

 

Well-designed preference modeling using a conjoint technique tends to be the recommended approach to test price as a function of defined product benefits or features. For pricing research, conjoint design uses a fairly limited number of carefully-selected attributes and levels that must be balanced to get good estimated price utility functions. Preference Modeling is an excellent tool to analyze sensitivity to price (see TMTG’s simPRO™ tool).  Preference Modeling is often the necessary foundation for Market Demand Models; however, since exogenous non-conjoint factors can influence customer demand and ultimately product market share, preference share should not be confused with market share.

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