Glossary - Vision One

Glossary

Brand Price Trade Off (BPTO)

Pricing Research – Brand Price Trade Off (BPTO)

Alongside Price Sensitivity Meter (PSM), the Brand Price Trade-Off (BPTO) research technique is another useful pricing research tool that can be used before launching a new product to market or when reviewing an existing product’s pricing strategy. It can also be used to measure brand equity as it effectively assess the value and elasticity of the brand in question.

In a typical Brand Price Trade Off research study, several brands or products in a category are shown together and the respondent chooses their preferred option. Then prices are adjusted (up or down) for one or more brands and the respondent chooses again. This is repeated numerous times so that purchase intentions can be measured at a range of price points. Overall, the output of the research provides the willingness of the price that individuals are willing to pay for a certain brand or product and allows brand owners to understand the take-up of a brand a specific price points.

Other pricing techniques to consider, include: simple willingness to pay questioning, Monadic price testing, Price Sensitivity Meter (PSM) and Conjoint Analysis, Willingness to pay or alternatively the analysis of actual sales or trials using regression and modelling methods to assess price elasticity. For more information check out Vision One’s new product development and pricing research.