Measuring Consumers' Willingness to Pay. Which Method fits best?

Miller, Klaus; Hofstetter, Reto; Krohmer, Harley; Zhang, John (2012). Measuring Consumers' Willingness to Pay. Which Method fits best? GFK Marketing Intelligence Review, 4(1), pp. 42-49. De Gruyter

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Gauging the maximum willingness to pay (WTP) of a product accurately is a critical success factor that determines not only market performance but also financial results. A number of approaches have therefore been developed to accurately estimate consumers’ willingness to pay. Here, four commonly used measurement approaches are compared using real purchase data as a benchmark. The relative strengths of each method are analyzed on the basis of statistical criteria and, more importantly, on their potential to predict managerially relevant criteria such as optimal price, quantity and profit. The results show a slight advantage of incentive-aligned approaches though the market settings need to be considered to choose the best-fitting procedure.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Innovation Management > Marketing

UniBE Contributor:

Miller, Klaus and Krohmer, Harley

Subjects:

600 Technology > 650 Management & public relations

ISSN:

1865-5866

Publisher:

De Gruyter

Language:

English

Submitter:

Andrea Stettler

Date Deposited:

31 Jan 2014 15:17

Last Modified:

13 Dec 2014 07:14

Uncontrolled Keywords:

Market Research, Pricing, Demand Estimation, Willingness to Pay, Hypothetical Bias

BORIS DOI:

10.7892/boris.40767

URI:

https://boris.unibe.ch/id/eprint/40767

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