Framework for Effective Pricing Strategy Development PPT

This PPT slide, part of the 21-slide Price Sensitivity Meter (PSM) PowerPoint presentation, presents the Price Sensitivity Meter (PSM) approach, which is a structured method for determining optimal product pricing. Developed by Peter Van Westendorp in 1976, this method involves a consumer survey that asks 4 key questions regarding price expectations. The responses help identify the maximum price consumers are willing to pay and the threshold above which they would likely refrain from purchasing. This insight is crucial for businesses aiming to set competitive yet profitable pricing strategies.

The slide outlines 3 primary steps in the PSM process. First, "Plan and Execute Market Research Survey" emphasizes the importance of carefully designed surveys to gather relevant consumer data. This initial phase is fundamental, as the quality of the survey directly influences the accuracy of the pricing analysis.

Next, "Analyze Data" signifies the need to interpret the collected responses effectively. This step involves statistical analysis to derive meaningful insights from consumer feedback. It’s essential for identifying trends and understanding consumer behavior regarding pricing.

Finally, "Evaluate Intersections to Determine Price" indicates the critical analysis of the data to find price points that align with consumer expectations. This step is where the actual pricing strategy is formulated based on the insights gained from the previous stages.

Overall, the PSM approach provides a systematic framework for organizations to make informed pricing decisions, ensuring that they align with market expectations while maximizing revenue potential. This method is particularly valuable for companies looking to integrate pricing analysis into their product development processes.

This slide is part of the Price Sensitivity Meter (PSM) PowerPoint presentation.

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