Consumers might state they have the intent to buy a particular product, but reality consists of many limitations that affect priorities. Prognosesenteret offers Willingness to Pay (WTP) studies that address this challenge and provide you with an estimate of the right price in a given situation.
For many years, Prognosesenteret has conducted WTP studies for different actors within the construction and property markets. We use a statistical research method whereby respondents make repeated choices between various combinations of offers at alternative prices. By this method, actual WTP can be calculated.
At a given price level and competitive situation, a certain number of people will buy a specific product or service. If the potential pool of customers is sufficient, then the price level is accurate. A variety of market situations can be simulated to identify the offer that provides the maximum income for your business.
The results of our WTP studies:
- Estimates of what different target groups are prepared to pay for a particular offer, providing in turn the ability to choose the right price in relation to the size of customer base required.
- Knowledge of the price level at which one offer is more sought-after than another.
- A view of the prevailing price elasticity i.e. the price sensitivity of the target audience.
- A certain percentage of the market will never buy (within the current price range); this proportion is shown in the survey.
- Simulations of what happens if the offer or competitive situation changes.
- Knowledge of how important the various components are in the buying decision.
Most times the order of priority is enough
Knowledge about the importance of one aspect over others is helpful when developing products, services, and new offers. WTP studies assume that price is one of the components considered in a decision. However, in many instances, it is sufficient to identify the target group’s priorities. In these cases, we work with research methods that provide information about how much more important a particular aspect och characteristic is than another.
For example a housing developer benefits from knowing that a large balcony is three times as important as smart storage, which is just as important as extra luxurious interior design choices. With that insight, the residential developer can weigh customer value against increased production costs to develop the most sought-after homes.
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