Who is van westendorp

Anything greater than this price point will have a limited number of buyers; every unit you increase the price past this, you will lose customers. This is where the "too cheap" and "expensive would consider" curves intersect. Here, many people think the product is too cheap, but the percentage is offset by a similar amount of people who consider the product too expensive but would consider.

Anything lower than this price point will have a limited number of buyers; every unit you decrease the price past this, you will lose customers.

This is where the "too expensive" and "too cheap" curves intersect. Only a small number of customers will not purchase the product from being too expensive or too cheap.

This price point is referred to as optimal only because of the low probability of customers rejecting the price. It does not mean optimum in the sense of maximizing revenue. Sometimes this price point is referred to as the "Market Entry" or "Penetration Price. Some data sets will never have an optimal price point. In this scenario, the "too cheap" and "too expensive" curves will never intersect.

The optimal price point should be more or less of a guide and not the sole focus of a pricing study. This is where the "expensive but would consider," and "bargain" curves intersect.

This point represents the greatest percentage of people who consider the price to be too expensive and not too cheap; this percentage of respondents is indifferent to this price. This point can generally be thought of as "Optimal" in the sense of maximizing revenue that will attract the greatest number of customers.

Anything outside of these ranges will result in fewer people buying because the product is too cheap or too expensive. The results of a Van Westendorp survey start by plotting curves with cumulative responses for each price point. The x-axis will contain all possible price values, and the y-axis will have the cumulative response percentage.

To make things easier to understand and show the math, we created an Excel file with all of the percentages calculated with formulas. Below is a chart with all four curves to plotted and the optimal price point and Indifference price point plotted. The results will also include a table showing the average price for each point respondents evaluated in each report. The default report will also display the range of acceptable prices.

Both the optimal price point and indifference price point are shown here. Back Resources What is XM? Back What is XM? Van Westendorp pricing studies explained. Subscribe Free Account. Researching prices is not straightforward Determining your price point through market research surveys is a notoriously tricky task. How does the Van Westendorp index work? The four questions are: At what price do you think the product is priced so low that it makes you question its quality?

At what price do you think the product is a bargain? At what price do you think the product begins to seem expensive? At what price do you think the product is too expensive? Get Started. Topics product experience product positioning. October 13, October 6, August 17, May 12, March 1, February 17, December 22, December 18, Stay up to date with the latest XM thought leadership, tips and news.

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Checking is simple:. Enter your school-issued email address:. Fully-functional online survey tool with various question types, logic, randomisation, and reporting for unlimited number of responses and surveys.

We send an occasional email to keep our users informed about new developments on Conjoint. You can always unsubscribe later. Your email will not be shared with other companies. Request consultation. Looking for a free online survey tool? Get started for free. Start now Book a demo. Using Van Westendorp to check if pricing is too high for the target market. View case study.

Each respondent is asked four questions on the price perception in Van Westendorp survey. Take example survey. View translations. Bring your own respondents or buy quality-assured panel respondents from us. Get respondents. Main outputs of Van Westendorp. Revenue vs. How it works In this methodology, Conjoint. This is the point at which an equal number of respondents describe the price as exceeding either their upper or lower limits. The technique is best used for new products to ensure that they are not launched too cheaply, leaving money on the table.

The tool can be applied in telephone interviews but it is best used in online surveys where respondents can give due consideration to what they think of different prices. Our client wanted to offer a new method of language training which involved a mix of online and telephone training exercises.

Respondents were chosen who either had used a language training agency or who were considering using one.