Research Solutions
BPTO (Brand-Price Trade-Off)
The goal of Brand-Price Trade-Off method is to determine the interrelationship between product alternatives (competitive products and possible cannibalization and price positions).

This method is rather accurate but it requires a significant investment and additional control monitoring. It is optimal for CAPI or CAWI-assisted in-hall product tests.

The standard Brand-Price Trade-Off includes:

  • A real purchase simulation. Respondents are presented with a “shelf” with a range of tested and competitive products with indicated prices.
  • Respondents are requested to make a choice and “purchase” a product.
  • Then the price for the selected products is increased by a point while the prices for all other products remain unchanged. Respondents are then asked to make another “purchase”.
  • The cycle continues until the price matrix has been filled in or until respondents give up on the products due to expensive price or switch to an alternative/substitute product.
  • The procedure could be repeated for all studied products.
  • On a number of occasions the test could run with a “none of the offered range” option. The test is completed once this option has been selected.

Brand-Price Trade-Off method helps to identify the following elements for the competitive and pricing environment for the studied product or service:

  • The key competitors for the product under survey, i.e. brands perceived by respondents as alternatives for the studied product;
  • Price elasticity for the studied product, for instance, a price increase impact on its market share;
  • The switching price point, the price level where consumers of competitive brands are likely to switch to the studied product;
  • The correlation between the price changes for the tested product and sales volume;
  • Consumer reaction towards price changes forecast.