Atrribute level definition for price

Question

Hi all,

In Mr.Orme book some general rules for defining price levels are mentioned. My question is that are there any specific rules to define levels( distance between prices and range of price) for price inelastic products VS price elastic products such as luxury products?

Thanks

Answer 1

Robin,

Hmmmm, interesting question.  My first thought was "No, I'm not aware of any."  But thinking more about it, for a very price elastic product, having a wide range of prices will cause price to dominate choices:  using a wide price range or large gaps between price points you run the risk of not learning about any of the other attributes.  

So I guess one piece of advice might be to make your price range narrower, and the gaps between price points smaller, when modeling a very price elastic product.

I've also used a particular type of dual response none for price elastic products (one where we put the price into the follow-up none question rather than in the choice alternatives) but that requires some custom programming before fielding and it adds a couple of steps to your modeling on the back end.