Price sensitivity testing as a basic tool for strategic pricing decisions

Jakub Kintler; Katarina Remenova; Maria Kmety Bartekova

doi:10.5937/StraMan2200028K

Authors

Jakub Kintler University of Economics in Bratislava, Bratislava, Slovakia
Katarina Remenova University of Economics in Bratislava, Bratislava, Slovakia
Maria Kmety Bartekova University of Economics in Bratislava, Bratislava, Slovakia

DOI:

https://doi.org/10.5937/StraMan2200028K

Keywords:

strategic decions, pricing, price sensitivity, van Westendorp price sensitivity measurement, reference price

Abstract

Background: Data-driven decisions in each functional area of management, through all of the strategic levels, in the present time of dynamic changes in geopolitical and market conditions are necessary to achieve corporate (economic and social) goals, in line with securing future business success and sustainability. Because of this business need, we will focus in our research paper on price management, which can be seen as a supportive tool for strategic decisions, where competent decisions should be based on data-driven pricing decisions.

Purpose: The aim of the research study is to identify what price consumers are prepared to pay for a new food product in a relatively saturated foreign market. The research study was conducted in the milk chocolate bar market segment.

Study design: We applied the van Westendorp price sensitivity test to identify the range of acceptable prices for a product that is willing to enter a new foreign market. For this purpose, we used a milk chocolate bar product currently unknown in the Slovak market.

Findings: In addition to the van Westendorp price sensitivity measurement, we used a non-parametric Mann Whitney U test to confirm the hypothesis that chocolate tasting will increase the likelihood of customers to pay a higher price for the tested product. The hypothesis mentioned above was statistically confirmed.

Limitations: It is necessary to monitor customer reactions to a given price level and be prepared to optimize it. We did not address this part of the analysis in identifying a price that would be acceptable to consumers in terms of value perception, due to the scope of the study.

Author Biographies

Jakub Kintler, University of Economics in Bratislava, Bratislava, Slovakia

Ing. Jakub Kintler, PhD., currently works as an assistant professor at the Department of Business Economics Faculty of Business Management University of Economics in Bratislava (FBM UEBA) and is the deputy head of the Department of Business Economics. Jakub has been a lecturer and researcher at the Department of Business Economy, Faculty of Business Management at the University of Economics in Bratislava since 2008. Since then, he has been teaching subjects focused on the theory and practice of business. Currently, he focus his teaching and research activities to the field of value. He teaches subjects oriented on the value based pricing, corporate valuation and business management at the Department of Business Economy. In addition to the teaching, he is also a forensic expert in the field of accounting, finance, controlling and human resources. He is also the owner and CEO of a successful retail company. As an author and co-author, he has also written several scientific research papers, monographs and textbooks. He is professionally involved in microeconomics, business economics and enterprise value management. Since he hes been at the university he wrote 4 scientific monographs (3 foreign), 2 teaching books and 5 workbooks, 83 scientific works published in domestic and foreign journals and conference proceedings (1 foreign karent journal) and 28 other works. As a co-investigator he participated in 7 VEGA projects and was a project representative in two of them. In the present time, he is leading scientific project financed from Ministry of Education called: “Dimensions of cross-sectoral entrepreneurship of cultural and creative industry entities in the context of sustainable development”. He is an active lecturer in the education of experts in the field of valuation. He is also an forensic expert for valuation in the field of economics and management (Accountancy and Taxes, HR, Controlling and finance). He has also completed specialized education for witness experts, accredited by the Ministry of Justice of the Slovak Republic, focusing on valuation and forensic analysis.

Katarina Remenova, University of Economics in Bratislava, Bratislava, Slovakia

Ing. Katarína Remeňová, PhD., MBA since 2010 has been with the Department of Management, Faculty of Business Management, University of Economics in Bratislava (FBM UEBA), where she currently holds the position of an Associate Professor. As a senior researcher, she is professionally engaged in the topic of data driven decision-making in general, as well as in specific research area – pricing. In the project, she will apply her knowledge in the development of an innovative concept of data-driven culture in order to provide the need for different data types for the decision-making process. She has led 2 projects at the university. As a co-investigator she has participated in 7 VEGA projects so far. She is co-author of 2 scientific foreign monographs and 9 scientific papers in foreign academic journals indexed in Web of Science and SCOPUS databases.