Getting the Pricing Right During Inflation with Help from a Market Research Company

In a world grappling with historic inflationary pressure, pricing has taken center stage, particularly in the context of new products. As a reputable market research company, we understand that the role of pricing and utilizing early consumer feedback becomes imperative in today’s era of economic challenges. Embark with us on an exploration of the vital dimensions involved in mastering pricing amidst inflationary challenges.

The Impact of Pricing on New Products: 1 Out Of 3 Brands Fail To Justify Perceived Price

Pricing isn't just a number; it's a pivotal factor that can either catapult a new product to success or lead it to obscurity. As revealed by a global analysis conducted by Kantar, a staggering 34% (approximately 1 out of 3) of brands fail to justify their perceived price. In times of inflation, this failure becomes even more pronounced, posing significant risks to sales, brand equity, and overall reputation. The statistics are clear – a considerable number of brands are falling short in justifying their perceived prices. As inflation takes a toll on disposable income, consumers are scrutinizing where they spend their money. Brands perceived as prioritizing profit over value face severe consequences, creating a domino effect that's challenging to halt. 

The Challenge for New Products

Launching a new product into the market is a venture laden with excitement and anticipation, but it comes with its own set of challenges, with pricing standing out as a formidable conundrum. The decision to set the right price for a new offering is a delicate balancing act that requires finesse and strategic thinking. Let us delve into the multifaceted challenges that new products face when it comes to setting their pricing.

The Delicate Balance

Unlike established favorites, the pricing journey for a new product demands a delicate equilibrium. Striking the right balance between presenting the product as unique and ensuring it is priced acceptably is a formidable task. The inherent risk lies in setting a price that is too high, deterring potential customers, or too low, potentially undervaluing the product.

The Instinctive vs. Deliberative Decision-Making

The dynamics of consumer decision-making play a crucial role in the pricing challenge for new products. Unlike the instinctive choices made when purchasing familiar items, decisions related to new products are more contemplative. Consumers weigh the perceived value against the price, making it imperative for the pricing strategy to align with the product's unique selling proposition.

The Make-or-Break Scenario

In terms of new products, pricing isn't just a factor; it's the make-or-break element that can significantly influence the success or failure of the launch. The challenge extends beyond merely offering something different; the product must also be priced in a way that resonates with potential customers. Recognizing that the price is right becomes paramount for enticing consumers to take a chance on something untested.

Building Trust Through Pricing

Consumer trust is a precious commodity, and pricing plays a pivotal role in its cultivation. If the price is perceived as fair and justifiable, it can contribute to building trust in the brand and the new product. On the contrary, a pricing strategy that appears opportunistic or exploitative can erode trust swiftly, leading to long-term consequences for sales and brand reputation.

The Trial and Adoption Dilemma

Encouraging consumers to try something new involves overcoming the hurdles of unfamiliarity and perceived risk. Consumers must not only recognize the uniqueness of the product but also feel that the price justifies the potential value and benefits offered. Failure to address this challenge can result in consumers sticking to familiar, tried-and-tested alternatives. 

Keeping it Real: Testing for Price Acceptability Early

To address the pricing challenges for new products, businesses can leverage early testing solutions provided by market research services. Specialized tools that a market research company has in its disposal are equipped with the latest price sensitivity modules. These tools enable researchers to swiftly assess how well a new product justifies its price point by collecting relevant data. Early testing empowers innovators to fine-tune pricing strategies before the product reaches the final launch stage. In this regard, the best market research companies can help provide data from which you can gain invaluable insights into consumers' perceptions of price ranges, potential misjudgments, and triggers that can rapidly alter their perceptions. It's a reality check for innovators – a chance to address pricing issues before they become insurmountable. 

Understanding Consumer Groups and Price Sensitivity

Not all individuals respond to pricing changes in the same manner, and the impact of inflation on different demographic segments can vary significantly. Identifying and comprehending these nuances is essential for aligning product prices with the preferences of specific consumer groups. Those most inclined to try something new are likely more willing to pay a premium for perceived value, making it crucial to tailor prices to match their expectations. Whether it's a consideration of an organic snack's premium, determining a reasonable fee for a new bank card, or evaluating the acceptability of prices for a novel menu item, a detailed understanding of diverse consumer groups ensures that the pricing strategy resonates with the target audience, fostering a successful product launch and sustained market presence. 

Consumer Feedback as a Price Reset Mechanism

Consumer feedback isn't a luxury; it's a necessity. Valuable data points such as consumer responses offer a valuable recalibration opportunity, allowing businesses to align their pricing with consumer perceptions and values. This iterative process of feedback and adjustment becomes particularly crucial during times of inflation, where consumer spending habits are influenced by economic uncertainties. By actively seeking and incorporating consumer feedback into pricing decisions, businesses can not only avoid potential missteps but also foster a more authentic and resonant connection with their target audience. This entire process ultimately contributes to the success and sustainability of the product in a dynamic market landscape. 

Final Word

Price, often overlooked in the marketing mix, has returned to the forefront in the face of inflationary pressure. As we navigate these challenging times, getting the price right for new products has become more critical than ever. If you're debating your new product's price point, remember to consult the ultimate decision-makers – the people you want to buy it. This is where hiring a market research agency can benefit your business in the long term. When looking for the top market research companies in India, look no further than Unimrkt Research. Spanning 90 countries worldwide and committed to ESOMAR norms, we have executed comprehensive industry research in various sectors. Setting ourselves apart from any other typical market research company, we proudly hold certifications for ISO 20252 and ISO 27001 standards, solidifying our commitment to delivering excellence when it comes to market research services. Whether you are looking for qualitative market research or quantitative market research services, we have got your back. Contact us at +91 124 424 5210/+91 9870 377 557 or sales@unimrkt.com to discover how we can enhance your business market research endeavors. You may also fill out our contact form and our representatives will reach out to you in no time.