Van Westendorp Market Research

The Van Westendorp Market Research approach helps to set and measure your most efficient product price.

Van Westendorp Market Research

The importance of Pricing Market Research

It is not uncommon to face challenges if your product is too expensive or too cheap. Products priced higher than expectations may not be consumed, while products priced lower than expectations will generate distrust about their quality. Therefore, correctly pricing is crucial for your brand. Pricing Market Research helps companies to become more profitable and efficient in satisfying their customers. Understanding how customers perceive value (benefits versus risk) is essential to business growth.

While some entrepreneurs and business managers tend to set prices by trial and error and intuition, there is a more scientific approach that can help maximize profit and customer satisfaction. Van Westendrop market research is a robust method to help optimize pricing through statistical precision and to also help boost profits.

What is Van Westendorp Market Research?

The Van Westendrop price analysis is composed of four questions:

  1. At what price would you consider the product to be too expensive that you would consider not buying it?;
  2. At what price would you consider the product to be priced too low and because of it you would feel that the quality of the product or service is poor?;
  3. At what price would you consider the product becoming too expensive – it is not out of the question, but you would have to give some thought to buying it?;
  4. At what price would you consider the product to be a bargain—a great buy for the money?

Answering those questions is not easy and can require pricing market research – such as questionnaires, quantitative/qualitative analysis, etc. When done correctly, the result of answers will prompt a graphic, which one can use to analyze prices.

How to use Van Westendorp Market Research

It is important to realize that many factors can influence pricing questions: demand, shortage, value, advertising techniques, etc. Key pricing questions include the following:

  1. Is my product priced too high?
  2. Is my product priced too low?
  3. Is the price of my product considered high enough to make people think it is premium?
  4. Is the price of my product considered low enough to make people think they should immediately buy?

The converging point of difference between being “too expensive” and “just expensive enough”, or “too cheap” and “a bargain”, is where you want to be with your product.

Generating value

Customers are aware that they have multiple opportunities to buy a desired product or service. Finding the sweet spot of cost-benefit, originality, and value, is the answer to “why people would choose MY product instead of the million others”; and to do that, it is necessary to understand the concept of value.

Value can be defined as what the customer will get in exchange for their money (benefits minus risk). Value can also mean what the company will get in exchange for their product.

Market Research dives even deeper to understand value — benefits minus risk — by understanding in-depth and measuring precisely how customers quantify the value of benefits. Example of benefits can be emotional connections and functional benefits (e.g. do the features work as intended). Pricing research and customer value analysis can help answer questions such as: Is the product desirable? Do I need it? How do consumers interact with that product? And many more questions. Pricing Market Research can help better understand Willingness to Pay, product volume and customer segmentation.

There are other variables in pricing such as seasonality that Market Research can help address. For instance, if you are selling umbrellas, their value increases on a rainy day – and prices can be adjusted to boost profit. But by how much?


Pricing communicates value and is important for branding, new product launches, profitability, marketing strategy, Return on Investment (ROI), operational efficiency, customer acquisition, customer retention and consistent revenue generation.

The relationship between pricing and product placement is also very important for your business. If your advertisements are targeting a group of people who have fine tastes, the pricing should be appropriate for those segments or personas.

An example of Van Westendorp Market Research

Let us say your company sells handmade organic fried potatoes, and you have your target segment identified and you understand their needs. For example, your results may look like that following:

  1. $12 for a pack is too expensive and most people would not buy it;
  2. $2 for a pack is too cheap and most people would doubt they are really handmade and organic;
  3. $9 for a pack would make most people curious and they would buy it, but if the potatoes are not the most delicious potatoes they have ever tried, they will not buy again and will leave negative feedback;
  4. $5 for a pack would make most people think it is honestly cheap and probably would give it a try.

While intuitively it might seem great to be at $5 or at $9, you are actually wasting potential profit by selling at that price. Usually, the product price has to target the intersections and relationships between those points, where it is getting too cheap or getting too expensive.

Now, it is also not correct to declare that $6.50 is the perfect price, because we did not go deep enough to understand the product dynamics, brand considerations, or market landscape. The Van Westendorp Market Research gets you only that far. Market Research helps provide nuance to the findings.

About Van Westendorp Market Research

Van Westendorp Market Research is a useful tool to understand product pricing and value. It provides helpful statistics and insight into branding, strategy, products, and marketing effectiveness. It is important to add nuance from the market landscape, customer recommendations and customer opinions in addition to the Van Westendorp measurements to generate a full view in a marketing strategy.

Van Westerndorp helps companies to maximize profits and provide customers with perceived value. The more research is conducted, the better results are achieved. Brand or product launches that disregard the science of pricing have a greater chance of failure – and, understandably, to not maximize profit.

SIS International Research has conducted Van Westendorp Market Research and Quantitative Pricing Market Research for decades. Contact us for your next Van Westendorp Market Research project.

Contact us for your next Market Research and Strategy Consulting Project.

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