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Price Sensitivity Analysis

Using deep primary research and extensive data analysis to help clients understand customer’s sensitivity to change in price of a product or service

Price perceptions Range of acceptable price Optimum price

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Price Sensitivity Analysis

What is the price positioning w.r.t. competition of a product in the market?
What are the directly competing products in the market? Who are the peripheral / indirect competitors?
Does the price positioning resonate with targeted customer segments?
How does the target compare w.r.t. competition in discounting and promotional schemes?
What is the margin for commanding premium?
What is the relation between the features of the product and the price range?
How do customer segments and behaviors vary with the price?
What are the factors for which customers are willing to pay a premium?
Are the customers willing to renew the services? At what price?

Relevant Case Studies

Consumer preferences and price sensitivity analysis
Consumer preferences and price sensitivity analysis for building & home materials industry
Price benchmarking of grocery store SKUs across retail formats
Price sensitivity analysis and its drivers for a major online-first health supplements player
Quantitative survey to understand price sensitivity of customers to different offerings for an internet first, cosmetics brand
Price benchmarking & sensitivity analysis b/w different channels like ecommerce platform vs local, branded & modern retail
Consumer preferences and price sensitivity analysis for a leading online food delivery player
Understanding purchase behavior and price sensitivity
Understanding the purchase behavior and price sensitivity of users
Understanding the monetization potential for a used car platform
Consumer preferences and price sensitivity analysis for an EdTech player
Price Benchmarking for e-commerce platform Vs Local retail, Branded Retail, Modern Retail

Consumer preferences and price sensitivity analysis

Objective

An Investment fund wanted to study the consumer preferences and price sensitivity for consumer durables

Methodology

Visited stores, demand centers and hubs, and spoke with ground staff and customers (N = 50+)
Conducted market research survey for the client (N = 1,500) across Metros, Tier 1 and Tier 2 cities
Spoken with more than 200 survey respondents to understand the specifics of purchase behavior in detail

Impact / Outcome

Successfully provided client with deep, comprehensive customer behavior aspects
Client was able to understand the price sensitivity trend by customer type, geo, product category and platform type (online vs offline)

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Consumer preferences and price sensitivity analysis for building & home materials industry

Objective

An Investment fund wanted to study the customer / contractor preferences and price sensitivity for Building & Home materials industry

Methodology

Visited stores, demand centers and hubs, and spoke with ground staff and customers (N = 50+) for 3 building material products
Conducted market research survey for the client (N=1,500) across Metros, Tier 1 and Tier 2 cities
Spoken with more than 200 survey respondents to understand the specifics of purchase behavior in detail

Impact / Outcome

Successfully provided client with deep, comprehensive customer / contractor behavior aspects
Client was able to understand the price sensitivity trend by customer / contractor type, geo, product category and platform type (online vs offline)

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Price benchmarking of grocery store SKUs across retail formats

Objective

A PE / VC firm wanted to benchmark prices and discounts across multiple retail formats and geographies in India

Methodology

Conducted trade interviews of retailers, and other relevant personnel such as store managers
Carried out market visits to benchmark multiple SKUs across three store formats

Impact / Outcome

Client was able to understand the buying behavior, pricing strategies and discounting strategies across multiple retail formats in India

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Price sensitivity analysis and its drivers for a major online-first health supplements player

Objective

To understand the main drivers behind the use and price sensitivity of online channel in health supplements purchases basis voice of customers

Methodology

Quantitative survey (N=1,000) of customer to identify driver tree basis the buying patterns
Survey was conducted pan India covering 12+ cities and customers across age group, income levels and usage frequency
Conducted in-depth customer interviews (N=50) to understand the willingness to pay for quality and product price analysis

Impact / Outcome

Client got an understanding of the buying and spending propensity of its user base along with inputs on adding premium product line

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Quantitative survey to understand price sensitivity of customers to different offerings for an internet first, cosmetics brand

Objective

Client wanted to understand customer customer profile and demographics and align it with price sensitivity / discount seeking behavior to understand the price elasticity curve for its multiple customer personas.

Methodology

Conducted survey (N = 500) across different demographic cuts including HHI, age and city tier; Customers were questioned on other avenues of expenditure (offline / online) along with experience and price point of purchasing with competitors / other offline players
Surveyed customers on their discount seeking behavior by mapping their spends on other online platforms with season end sales and other year-round discount schemes; Derived insights on optimal SKU sizes and price differential on each SKU
Carried out sensitivity analysis for each customer segment to understand their price elasticity curve

Impact / Outcome

Helped the client with understanding of pricing and discount seeking behavior of its customer segments thereby enabling the client to find right price points and SKUs mix

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Price benchmarking & sensitivity analysis b/w different channels like ecommerce platform vs local, branded & modern retail

Objective

Client was a global PE firm
Client desired to understand the price benchmarking of 550 SKUs across categories (fashion, apparel, beauty & personal care) for ecommerce platform vs offline channels (local retail shops, branded retail chains, modern trade, etc.) & price sensitivity of consumers across categories

Methodology

Market analysis: Input collected from 10 cities across local retail shops, branded retail shops and modern trade players
Qualitative discussions with consumers around various categories

Impact / Outcome

Helped the client to gain quantitative & qualitative insights on prices across metros, tier-2, tier-3 cities in India as compared to ecommerce platform

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Consumer preferences and price sensitivity analysis for a leading online food delivery player

Objective

A FoodTech player wanted to understand customer preferences and price sensitivity and validate the pricing of different subscriptions it offers

Methodology

Conducted in-depth interviews with customers (N = 40+) with a diverse set of customer segments (students, working professionals, domestic migrants, etc.) to validate the offering and its associated pricing across the subscription model.
Understood types of subscription models in food home-delivery sought by customers (healthy, medicinal diet, khichdi, regular/staple meal, etc.) and their willingness to pay for these offerings across consumption frequency (a la carte, weekly, monthly, etc.)
Conducted customer survey (N = 200) to understand the overlap between order tendency vs price to derive the inflection point where players can generate maximum revenue (# orders vs $ price per order)

Impact / Outcome

Successfully provided the client with a deep, comprehensive perception of pricing for different subscriptions models and explain what is considered ‘value-for-money’ by customers
Client was able to understand the price sensitivity across customer personas and subscription models

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Understanding purchase behavior and price sensitivity

Objective

The client wanted to understand the customer perception, user behavior & trends, and their price sensitivity

Methodology

Conducted a customer survey (N = 1,500) and IDIs (N = 10) with users of the target platform along with (N = 1,000) and IDIs (N = 30) with users of competition platforms to understand awareness, usage, and key selection criteria
Understood customer buying frequency, average spend, and NPS
Evaluated price sensitivity of the buyers and end-use trends of heavy spenders

Impact / outcome

Successfully provided the client with a deep insight into the different behaviors exhibited by customers across different spend ranges

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Understanding the purchase behavior and price sensitivity of users

Objective

The client wanted to understand the customer perception for price difference among platforms, user behaviour, price sensitivity and trends in the media market

Methodology

Conducted a customer survey (N = 1,500) and IDIs (N = 10) with users of the target platform
Also conducted in-depth interviews with (N = 1,000) and IDIs (N = 30) with users of competition platforms
Identified and analyzed the awareness, usage, and key selection criteria
Understanding buying frequency, average spend, and NPS
Evaluating price sensitivity of the buyers
Understanding end use trends of heavy spenders

Impact / outcome

Successfully provided the client with a deep insight into the different behaviors exhibited by customers across different spend ranges

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Understanding the monetization potential for a used car platform

Objective

A PE investor wanted to understand the monetization potential for a used car platform and price sensitivity analysis of the buyers

Methodology

Projected future customer acquisitions through various channels & penetration of smartphone & internet for improved user experience
Estimated CAC for acquiring users through various channels after assessing the evolution of dependency on those channels
Conducted in-depth interviews (N = 30) to understand the preferences and behaviours of customers in reference to online and offline mode of purchase
Estimated the revenue through 3 different approaches: Growth of # ad impressions, revenue / user & market share

Impact / outcome

Successfully provided the client with a deep insight into the future market projections and identified detailed reasons for customer preferences among various platforms

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Consumer preferences and price sensitivity analysis for an EdTech player

Objective

An EdTech player wanted to understand the price sensitivity of parents for paid offering of their learning platform

Methodology

Conducted quantitative survey with parents of learners (N = 3000) across different income groups to understand the willingness to try the platform for different price points and at what range an offering is considered under-priced (lower quality) vs over-priced (poor value for money)
Created detailed analysis across different cities and income groups to understand the optimum price point that can drive maximum sales

Impact / Outcome

Client was able to understand the price sensitivity curve and was able to establish optimal pricing for the said offering

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Price Benchmarking for e-commerce platform Vs Local retail, Branded Retail, Modern Retail

Objective

Client was a global PE firm
Client?desired to understand the price benchmarking of 550 SKUs across categories (fashion, apparel, beauty & personal care) for e-commerce platform vs offline channels (local retail shops, branded retail chains, Modern Trade, etc.)

Methodology

Conducted in-depth interviews and surveys with shopkeepers of local, branded and modern trade stores
Visited 10 various cities in Tier-1, Tier-2 and Tier-3 to conduct in-depth interviews
Benchmarked prices of various categories of products like fashion, beauty, etc.
Input collected from 10 cities across local retail shops, branded retail shops and modern trade players