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MSPS (Market Share Price Sensitivity) Framework™

When implementing a new product or service, decisions on pricing and optimal mix often plague the minds of marketers. How does one predict the impact of every pricing decision on customers?

Pricing studies can be very challenging. The limitations that most pricing studies present tend to be as follows:

	With direct questioning approach, results can be biased, with consumers claiming that they want the cheapest.
	During the research exercise respondents are sensitised to the pricing component, but during the actual purchase, customers trade off multiple factors to derive at final decision.
	Pricing is singled out in analysis, but not linked back to the other contributing factors, namely the tangible products offering or the intangible brand name and image.
	The study measures the elasticity of the individual brand, but the customers do actually compare multiple brands.

Asia Insight has developed the MSPS Framework™ that:

	Minimises biases by multiple questioning techniques
	Reflects the actual market situation by determining the impact on client’s market share vs. key competitors
	Takes a more holistic perspective by considering the multi-dimensional interaction between pricing, product concept, brand name and image

Its primary objective being prediction, Conjoint Analysis addresses with a cold, hard look, some of the most pressing questions that marketers are facing:

	Which of these products will be successful?
	Which features of my product are driving the purchase decisions?
	How do buyers trade off product features with prices? How much of one attribute would the consumers give up for more of another?
	Which is the optimal price that I should charge to my customers?

Rather than ask consumers directly about what they think is important, Conjoint Analysis 'derives' this importance pyramid after analysing their choices. This better reflects the choices consumers may make in a real world context.

Simulation Models are used to generate predictions of how consumers respond in the face of changing market conditions and they are usually accurate for two to three years, depending on the nature of the market.

The Conjoint Exercise is never used in a vacuum, but always augmented with direct questions that supplement the findings from the Conjoint analysis. Findings derived from Conjoint Exercise are always presented within the perspective of market context, e.g. weighted back to market share.