Updated: September, 2026
Published: July, 2024
Pricing Research 101: Setting the Right Price for Market Success
Trying to pin down the right price for your product can feel like you need an economics degree. Competitors keep adjusting their own prices, budgets are tighter than usual, and one wrong call can dent a whole year's growth. The good news: you don't have to guess. Pricing research gives you a set of proven methods for finding the price that actually works — for your customers and for your margins.
What Is Pricing Research?
Pricing research is a branch of quantitative market research that measures how real customers respond to different prices, rather than relying on gut feel, competitor benchmarking alone, or a simple cost-plus formula. Instead of asking ‘what should we charge?’, it asks ‘what will customers actually pay, and why?’ — then turns the answers into a defensible price or price range.
At the centre of most pricing research is willingness to pay: the maximum price a customer is prepared to pay for a product before they consider it not worth it. Every methodology in this guide — Gabor-Granger, Van Westendorp, and Conjoint Analysis — measures willingness to pay in a different way, from a different angle.
How Pricing Research Works
Most pricing research studies follow the same basic process, whichever methodology you choose:
1. Define the question. Are you launching a new product, adjusting an existing price, or testing how far you can raise prices before demand drops?
2. Choose the right methodology. Match the method to your situation — see ‘When to Use Which Methodology’ below.
3. Field the survey. Ask a representative sample of your target customers to react to a series of prices or product scenarios.
4. Analyse the results. Convert responses into a price point or acceptable price range, alongside the expected impact on demand and revenue.
5. Validate and decide. Cross-check the recommended price against your costs, competitor pricing, and business goals before rolling it out.
3 Pricing Research Methodologies for Pricing Your Products and Services Right
This guide walks through three pricing research methodologies — Gabor-Granger, Van Westendorp, and Conjoint Analysis — each measuring willingness to pay from a different angle. Used well, they replace guesswork with customer data you can act on with confidence.
1. Gabor-Granger Methodology: Estimating Price Elasticity
The Gabor-Granger method shows how demand changes as price changes. It asks customers whether they'd buy a product at a series of ascending or descending prices, then uses the pattern of answers to calculate price elasticity — how sensitive demand is to a price change — and to estimate revenue at each price point.
A short video explaining the Gabor-Granger Price Strategy
• Measures elasticity directly: calculates exactly how far demand shifts at each price point, helping you find the price that maximises revenue without losing customers.
• Works from real market data: because it's based on actual past pricing and buying behaviour, it's reliable for products already on the market.
• Good for fine-tuning: precise enough to show whether even a small price change — say, a 5% increase — will help or hurt revenue.
2. Van Westendorp Pricing Research Methodology: Unveiling the Optimal Price Range
The Van Westendorp Price Sensitivity Meter finds the range of prices customers consider acceptable for a product, without needing any pricing history. It asks four questions: at what price would this product be so cheap you'd doubt its quality, a bargain, starting to feel expensive, and too expensive to buy. Plotting the answers reveals an acceptable price range and an optimal price point.
A short video explaining the Van Westendorp Price Sensitivity Meter (PSM)
• Quantifies perceived value: turns customer perceptions of ‘cheap’ and ‘expensive’ into hard price points, rather than a hunch.
• Works without pricing history: because it doesn't rely on past sales data, it's well suited to pricing something entirely new.
• Ideal for new products: if you're pricing ahead of launch, Van Westendorp gives you an evidence-based starting range rather than a guess.
3. Conjoint Pricing Research Methodology: Revealing Product Attribute Importance
Conjoint analysis shows customers a series of product variants — each combining different features, such as price, size, and branding — and asks which they'd choose. The pattern of choices reveals how much customers value each attribute, including price, relative to the others.
A short video explaining Conjoint Analysis
• Measures attribute importance: shows exactly how much weight customers place on price versus features like brand, size, or flavour.
• Reveals ideal combinations: by testing different feature bundles, it identifies which combinations of attributes and price customers prefer most.
• Suited to complex products: best for products with several attributes, where price can't be considered in isolation.
Need help running a pricing study like this?
When to Use Which Methodology
Each methodology fits a different pricing situation. Here's how to choose.
Gabor-Granger
Use Gabor-Granger when your product is already on the market and you want to fine-tune its price. It's well suited to estimating price elasticity and predicting revenue at different price points.
Price test with Gabor-Granger:
• Used to identify price elasticity, predict estimated revenue, and understand how price changes affect sales volume
• The product is already on the market
• The aim is to optimise and predict revenue or profit
• Competitors' market shares can be estimated
• Data is processed using an inverse cumulative distribution to reveal price elasticity of demand
• Results show the proportion of customers willing to buy and the revenue-maximising price
Price Elasticity with Gabor-Granger
Van Westendorp
Use Van Westendorp when there's no established price for the product yet — for example, ahead of a launch or when entering a new market. It identifies a range of acceptable prices rather than a single number.
Price test with Van Westendorp:
• There is no established price for the product (e.g., a new product or new market)
• Actual demand isn't predicted at specific price points
• The aim is to determine how much consumers are willing to pay
• The product is finalised — only the price can change based on the results
• Results identify a range of acceptable prices; the Optimal Price Point isn't the only possible ‘best’ price
The Van Westendorp Price Model
Conjoint Analysis
Use Conjoint Analysis when your product has several attributes and you need to understand how price trades off against features like brand, size, or flavour.
Price test with Conjoint Analysis:
• Understand the importance of price relative to other attributes (e.g., price, colour, brand, size)
• Identify the impact of attributes on consumers' perceived value of the product and their preferred combination
• Uncover market shares, including competitor brands, and purchase intent for different options
• Can be run as choice-based conjoint or adaptive choice-based conjoint
• Product attributes and attribute levels should be predefined
Conjoint Price Analysis
Frequently Asked Questions
What is pricing research?
Pricing research is a type of quantitative market research that measures what customers are actually willing to pay for a product or service, using real survey responses rather than assumptions or competitor benchmarking alone.
What is willingness to pay?
Willingness to pay is the maximum price a customer would pay for a product before deciding it isn't worth the cost. It's the core concept every pricing research methodology aims to measure.
What's the difference between pricing research and market research?
Pricing research is one specific type of market research. Where market research covers a wide range of questions — from brand perception to product concepts — pricing research focuses specifically on finding the right price.
How do I choose the right pricing research method?
It depends on your situation. Use Gabor-Granger to fine-tune the price of a product already on the market, Van Westendorp to find an acceptable price range for a new product, and Conjoint Analysis when price needs to be weighed against other product features.
Conclusion
Pricing research replaces guesswork with real customer data. Gabor-Granger, Van Westendorp, and Conjoint Analysis each measure willingness to pay from a different angle — together, they cover most pricing scenarios you're likely to face. Choose the method that matches your situation, and let the data set your price.
Want to learn more about how market research can help you succeed in a competitive marketplace? Check out our blog post, ‘The Ultimate Guide to Consumer Insights and Market Intelligence’.
How our pricing study optimised revenue potential for Tyson Foods
“The survey results are very interesting, we got a clearer picture of the category consumers, how our brand performs and how to improve the brand performance with marketing communication. We also saw clear indications that we can optimise the base price per unit. We will be using the results to adjust the target groups for the digital marketing campaigns."
Tjerk Boorsma
Marketing Intelligence & Consumer Insights Specialist
