How Wizer Used A.I. to Complete a van Westendorp for $500

Conducting pricing research is an important step in uncovering the value that consumers place on products to discover the price range consumers are willing to pay for a product, service, or idea. It also gives organizations insight on how to increase revenue and convert market share by means of price optimization for proposed innovations, design changes, or concepts. Since marketing today is becoming more dynamic and consumer-centric, we aim to help our clients address rapidly changing consumer preferences that may affect pricing decisions—putting consumers at the heart of pricing research and ensuring that the price for a product or service is at the optimum point for all participants.

Van Westendorp Chart

A Dutch economist, Peter van Westendorp, introduced a simple tool for determining the optimal price for products (OPP) in 1976, called the van Westendorp Price Sensitivity Meter (PSM), the technique asks respondents four indirect questions about their willingness to pay and measures overall price sensitivity of consumers. In other words, it discovers, from actual consumers, prices for a product or service they perceive to be either too high, too low, or just right.

Access to the van Westendorp PSM can be expensive, not only because of its complicated nature but also because higher performing organizations will make use of the tool frequently to come up with up-to-date pricing structure based on shifting market landscape, product innovations, communications, and ever changing consumer perceptions.

Wizer makes pricing sensitivity research programs cost effective for everyone by using machine learning and algorithms to automate the research. Leveraging our technology, we could add the van Westendorp PSM as a turnkey service and provide this essential outlook on pricing as a part of our research offerings. This means clients seeking a pricing optimization tool can now “add to cart” this previously prohibitively expensive add-on – starting at only $500 per concept or tested product – and get results in days, not weeks.

A quantitative approach, the van Westendorp PSM method asks questions that characterize four price points — what is so cheap that you question quality; expensive, but acceptable; too expensive to consider; and cheap, but a fair deal. Plotting the answers to these questions aids in isolating the “optimum” range and price.

Even though the PSM defines an OPP, it is also important to consider the range of acceptable pricing which falls between the upper and lower price threshold. Prices within this range are accepted by the majority.

Conducting pricing research with van Westendorp PSM should be done on a regular basis as there are many factors affecting consumer perceptions, for example, when a competitor comes out with a new product or service that is cheaper or more expensive, or when there is a significant change to the overall consumer target.

With artificial intelligence, Wizer makes van Westendorp PSM more accessible for everyone. Using this technique, in addition to the company’s other knowledge resources, Wizer has provided insights regarding pricing strategies and guided clients not only in identifying the right prices but also in improving consumer perceptions in their markets.

CASE STUDY:

At Wizer, we applied the van Westendorp PSM in a concept test study conducted for a leading food manufacturer examining new food concepts and their ideal pricing points. The results show that the OPP is $7.30, and the optimal price range is between $6.57 and $10.90.

Van Westendorp Case Study

The van Westendorp PSM provides a data-driven method in determining the pricing strategy for a product or service. It is easy to implement and relatively simple to analyze. Moreover, as presented, it is useful in finding price thresholds and perceived normal prices.

2017: The Year of Insight Automation

2017-1

Consumer research is among the areas in marketing that hardly budged during the digital revolution of the last decade. Unlike other facets of marketing that are becoming more digital- and cloud-based, marketing research has largely remained labor-intensive and human-centric. In 2016, Chiefmartec listed 3,874 marketing technologies in around 50 categories. However, consumer research is not one of the categories listed.

In the last couple of years, however, developments in consumer research technology have started to accelerate. The availability of machine learning and newly developed A.I. algorithms can solve many of the shortcomings of the old survey platforms, and new consumer research platforms can now use artificial intelligence to mimic expert market researchers and even provide results of similar or better quality.

At Wizer, we are proud to be innovators in the world of marketing insight automation. Here are some of the improvements that we have implemented to address the shortcomings of previous generation online surveys:

  • Building the questionnaire: Rather than manually programming survey question by survey question, our artificial intelligence algorithms will now structure your study simply by asking you a series of questions about what you want to accomplish — selecting from a vast array of questions and research methodologies and providing the optimal research questionnaire based on those objectives.
  • Fielding the survey: With platforms using real-time monitoring, we can guarantee that you are getting a representative and valid sample of your target audience.
  • Analyzing the results: Instead of having research managers crunch the data, our platform can analyze the data instantly—reducing the time required for analysis from weeks to minutes, while avoiding or mitigating human errors.
  • Visualizing results: Our robust visualization platform replaces the time-consuming building and analyzing of PowerPoint slides and provides and highlights the most important insights, helping you understand top line results and the most important things to act on.
  • Out-of-the-box, custom benchmark database: Even traditional agencies struggle to measure your organizational benchmarks and KPIs and give it meaning in the context of your business and overall category. As part of its unique knowledge center, Wizer actually builds benchmarks and KPIs for each and every customer, automatically!
  • Get the bottom line first: You conducted research because you wanted answers, not just a hundred pages of charts and cross-tabulations. Wizer’s A.I. technology finds and emphasizes statistically significant findings and presents them in an easy to read executive summary scorecard that gets to your answers fast —in text and infographics—and highlights any other interesting finding across the report.

Consumer research is now joining an important trend of leveraging technology to accomplish business objectives faster, better and cheaper (up to 70% cheaper in some cases!). When insights are easier and more affordable, organizations can develop a culture of rigorous data-driven decisions—in a way that was virtually impossible before.

The Fung Global Retail and Technology Fund Identifies Wizer as an Innovator in the Consumer Research Space

Wizer and Fung Fund

In their 2009 book Start-up Nation: The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer explored why Israel has more NASDAQ listed companies than any other nation but the US. The book reviewed how a small nation of a little more than 7 million people managed to become a technology super-power, second only to Silicon Valley.

A few weeks ago, the Fung Global Retail and Technology fund team travelled to Israel to meet with local startups that are disrupting the retail space and visit multinationals that operate within Israel’s booming technology space.

One of the companies that the Fung team met with was Wizer. During their visit, the Fung team got an in-depth demonstration of how Wizer leverages artificial intelligence to provide consumer research and intelligence.

The team also visited several other innovation centers and accelerators across Israel. To read the Fung team’s notes about the trip, click here.

The internet has left market research behind

iMedia Connection In a new post on iMedia Connection, Idan Geva, Co-founder of Wizer, says that while the Internet has changed many industries, marketing research has remained more or less the same. Read the full post to discover where the market research industry is heading and how it is going to change.

“Having worked in market research for over a dozen years, I believe that market research over the internet has not progressed much since 1990s. Commercially, it would appear that the last leap forward for online market research was led by SurveyMonkey — enabling marketers to harness the power of the internet for conducting self-serve web-based interviews. Can an industry that boasts aligning with technologies 5 to 10 (or more) years old congratulate itself and claim that it has thoroughly or even mildly evolved?”

Click here to read the full post

 

 

 

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Wizer helps SodaStream dive deep into consumer insight

We went on the road to meet one of our favorite customers, sodastream. This is what they had to say about Wizer.