A Survey Technique to Measure Demand under Various Pricing Strategies

Abstract

One of the more challenging tasks that confronts marketing researchers is that of determining the probable effect of different pricing policies on the sales of a new or existing product. Closely allied to this problem is that of determining how the modification of a product or of its image will affect sales if price remains constant or if it, too, is modified in some manner. A manufacturer will be interested in knowing how changes in demand will affect revenue and, probably more importantly, how they will affect profitability. A manufacturer with more than one product in the same category will be concerned with how changes in demand for one product will affect demand for others, and how the profitability of the entire line will be affected. Frequently, the marketer cannot conduct a test involving actual sales to measure the effect of price changes for reasons of either time or cost, and often a test market is not appropriate because of the nature of the product itself. The latter is particularly true for many industrial goods and big-ticket items. Instead, researchers often conduct surveys among consumers to obtain an indication of how demand might be altered, using a series of questions that ask the consumer to indicate his likely buying behavior under various conditions.