We will present our new article “Downsizing the Product or Increasing the Price: Consumer Reactions to Price Increase Strategies” at the 40th EMAC Conference in Liublijana, Slovenia. The article deals with the optimal price increase strategies for managers and was co-written by David Blatter, Reto Hofstetter, Harley Krohmer, Klaus Miller and John Zhang.
We will be presenting our paper “Measuring Consumers’ Willingness to Pay: Do Direct Approaches Really Work?” at the 8th annual Product and Service Innovation Conference in Park City, Utah. Co-authors are Harley Krohmer from the University of Bern in Switzerland and John Zhang from the Wharton School at the University of Pennsylvania. The conference will take place from February 3rd to 5th, 2011. Hope to see you there!
Article “How Should Consumers’ Willingness to Pay Be Measured?” now published in the February issue of the Journal of Markting Research (JMR)January 21, 2011
To make many marketing decisions in an informed way, such as formulating competitive strategies, conducting value audits, developing new products, and implementing various pricing tactics, firms need to accurately gauge consumer willingness to pay. However, to perform this task, marketing researchers face a plethora of approaches that differ in complexity, implementation costs, and accuracy. In this study, the authors facilitate a marketing researcher’s choice by investigating the performance of four commonly used approaches to real purchase data (REAL): the open-ended (OE) question format, choice-based conjoint (CBC) analysis, the Becker, DeGroot, and Marschak’s (BDM) incentive-compatible mechanism, and incentive-aligned choice-based conjoint (ICBC) analysis. With this five-in-one approach, the authors test the relative strengths of the four measurement methods, using REAL as the benchmark, on the basis of statistical criteria as well as decision-relevant metrics.
The results indicate that the BDM mechanism and ICBC can pass statistical and decision-oriented tests. The authors find respondents to be more price sensitive in incentive-aligned settings than in non-incentive-aligned settings and the real purchase setting. The study also uncovers an intriguing possibility: Even when the OE and CBC generate hypothetical bias, they may still lead to the right demand curves and right pricing decisions.
Professor John Zhang of The Wharton School is talking about the benefits of pay-as-you-wish pricing. Check it out here:
There are other videos available on the topics of:
Trends in pricing
How the recession affected pricing
Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for ProfitabilityFebruary 27, 2010
New book by our mentor John Zhang from the Wharton School:
In Smart Pricing, Wharton professors and renowned pricing experts Jagmohan Raju and Z. John Zhang draw on examples from high tech to low tech, from consumer markets to business markets, and from U.S. to abroad, to tell the stories of how innovative pricing strategies can help companies create and capture value as well as customers. They teach the pricing principles behind those innovative ideas and practices.
Smart Pricing introduces to marketing and product executives, along with corporate strategists, many innovative approaches to pricing, as well as the research and insights that went into their creation. Filled with illustrative examples from the business world, readers will discover restaurants where customers set the price…learn how Google and other high-tech firms have used pricing to remake whole industries…and understand how executives in China successfully start and fight price wars to conquer new markets.
Smart Pricing goes way beyond familiar approaches like cost-plus, buyer-based pricing, or competition-based pricing, and puts a wide variety of pricing mechanisms at your disposal. This book helps you understand them, choose them, and use them to win.
“Name Your Own Price”: Not Just For Priceline Anymore
New ways to match the right offer with the right customer at the right moment
The New Art of the Price War
How to plan and execute a price war to conquer new sales territories
Are the Best Things in Life Really Free?
What you can give away, what you can’t, and how to defend against “free”
The Snob Premium: From Cachet to Cash
The more you pay, the more it’s worth
Die Kenntnis der maximalen Zahlungsbereitschaft von Konsumenten ist von zentraler Bedeutung für Preisentscheidungen im Unternehmen. Es ist deshalb kaum verwunderlich, dass eine Reihe von Methoden für ihre Messung entwickelt wurde. Nicht vollständig geklärt ist bislang, welche Methoden valide Messresultate liefern können. Ein neuer Artikel in der Marketing Review Sankt Gallen gibt Marktforschern einen Überblick über die existierenden Messmethoden und hilft bei der Auswahl einer geeigneten Methode in der Praxis.
Our dissertation “Precision Pricing: Measuring Consumers’ Willingness to Pay Accurately” is now available as book for EUR 49.00 (CHF 81.00).
Voices on the book
“Setting the ‘right’ price is one of the key management tasks that drive a firm’s performance. Even small price variations can have a major impact on sales and profitability. Therefore, it is important for managers to know consumers’ willingness to pay as precisely as possible in order to harvest their product’s profit potential as much as possible. This book will help you get your price right!”
Professor Dr. Dr. Z. John Zhang
The Wharton School,
University of Pennsylvania, USA.
The articles from our dissertation are now available as pdf downloads. Get your copy below:
Including all four articles. Available as eBook (PDF) for EURO 19.00.
Dissertation by Article
Available as eBooks (PDF) for EURO 9.00 each.
Chicago here we come! We will be presenting our two current papers on how to measure WTP and whom to ask when measuring WTP written together with John Zhang from the Wharton School and Harley Krohmer from the University of Bern at the Summer Educator’s Conference of the American Marketing Association (AMA) in Chicago. The conference will take place from August, 7th until August, 10th 2009. The papers will also be published in the conference proceedings. We are looking forward to some good discussions and input from other researchers. Maybe we see some of you folks there!
We have a new article forthcoming in a special issue on Pricemanagement of the Marketing Review Sankt Gallen (MRSG). The article deals with the issue how managers can achieve better pricing decisions using valid measurement instruments to gauge consumer’s willingness to pay. As of now the article will only be available in German (German Title: Bessere Preisentscheidungen durch valide Messung der Zahlungsbereitschaft von Konsumenten). The special issue will be available in print in October 2009. We will then also post a online version for download. Comments are appreciated.