Brand-Price Trade-Off
Brand-Price Trade-Off (BPTO) is a specialised tool that answers pricing questions for consumer goods in a competitive context. It is particularly useful when you want to:
- Forecast revenue, profitability, and market volume performance after launching a new product or re-pricing an existing product.
- Identify the source of volume your new pricing or NPD is most likely to capture from, helping you avoid cannibalising your own products.
- Evaluate the impact of awareness and advertising on the adoption of new concepts.
Based on the ideas and algorithms of conjoint analysis and Van Westendorp, BPTO is a choice-based technique that reflects consumers' differing preferences for SKUs/brands as well as budget and psychological pricing constraints.
Using BPTO to find a new flavour with the highest revenue potential and preference share.
The survey flow consists of four separate exercises to introduce respondents to our NPDs.
View our tips and tricks on setting up a BPTO get maximum value from the study.
Bring your own respondents or source real human respondents swiftly and at scale through us.
Main outputs
NPD volume share simulation
Through simulation, you can estimate the volume shares following the introduction of your NPDs, and compare performance before and after adcepts are shown to respondents. This helps to assess the impact of awareness/advertising has on your NPD adoption.
The example study shows that NPD Lemon has the highest adoption rate, even before the adcept is displayed.
Movements in volume share
Movements in volume share show the increase and decrease in each of the current SKUs after introducing your NPDs. This helps to determine whether each NPD's increased volume share is derived from your existing SKUs or from competitors.
The example study shows that each NPD’s market share sources different proportions from our competitors.
Price elasticity of demand
Calculate the specific coefficient of price elasticity of demand for your NPDs by selecting two points on the simulation chart (the approximate price elasticity of demand is automatically calculated and displayed in Conjointly). This helps you understand how market volume will perform at the different price points your NPDs were tested at.
The example study shows that for Fresh Raspberry, demand is elastic (i.e. an increase in price by 1% leads to more than 1% drop in volume). Revenue does not vary greatly, regardless of price point.
Revenue/Profits Index
Through simulation, you can learn how our NPDs' revenue and profitability will perform at different price points. Revenue projections are displayed in the simulation chart by default (this can be switched to profitability) and are calculated by assuming 1000 units offered. Profitability is calculated using assumed fixed and variable costs through the formulas: Revenue = price * share * 1000; Profit = (price-$1) * share * 1000. You can replace the assumed 1000 units with the total market volume of your product category to get more accurate prediction of your product revenue or profitability.
Van Westendorp Price Sensitivity Meter
Van Westendorp results show the psychologically acceptable range of prices for your NPDs. It can be used as a diagnostic to validate the recommended price from the main conjoint exercise.
Other outputs
Experiment outputs and raw data are available as an Excel workbook — confidence intervals are provided wherever possible, and all reports can be segmented by respondent information, respondents' answers to additional questions, sentiment analysis, GET variables, and your uploaded variables.
These results will help us to answer the following (and similar) questions:
- Are the results significantly different with confidence intervals?
- What are the performances of different segments?
