Contribution research your market, provide facts, and advice on:
Value propositions
Which product benefits do the customers perceive and how are these best captured in strong value propositions?
Brand value
What price premiums do customers accept as fair?
Price models and price level
Which pricing model best exploits customer value, and at what specific prices?
Product portfolio optimization
Which portfolio of products is the strongest to capitalize on the different price segments?
Segmentation
What price segments exist in the market and what is the product- and price combination that yields the highest market share?
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Client Case
Situation
A client was about to lower its prices due to perceived price pressure and Chinese newcomers, which were rumored to enter its markets.
Our task
Contribution was asked to analyze, how much the prices needed to be lowered to keep market shares.
Approach
A value map (perceived benefits versus perceived price) analysis was conducted among Scandinavian customers.
Conclusion
The client proved to be wrong. The large majority of customers perceived the clients products not only to be significantly better, but also cheaper:
Thus, there was no need to lower the prices. Instead prices were raised – and with no negative customer responses.