Van Westendorp Pricing
What is the Van Westendorp Price Sensitivity Meter?
Developed by Dutch economist Peter van Westendorp, this method uses four key pricing questions to understand how consumers perceive value and price. The responses are then analyzed to reveal:
- The acceptable price range, between too cheap and too expensive
- The optimal price point where price and perceived value are best balanced
When and How to Use Van Westendorp
Van Westendorp is especially useful in these situations:
- Early product development: Test how consumers might value a new concept or prototype.
- Product updates or redesigns: Gauge pricing tolerance for new features or improvements.
- Market entry: Understand how a product might be positioned against existing alternatives.
- Repositioning: Validate whether current pricing aligns with consumer expectations.
Highlight supports testing both physical products and concepts, making it ideal for guiding pricing decisions for everything from early-stage concepts to ready to launch prototypes.
Van Westendorp Questions
Van Westendorp analysis evaluates responses to four key open-ended pricing questions, which together capture respondents’ nuanced price perceptions.
The four must-have questions included in the Van Westendorp Pricing module are:
- Too cheap: At what price would you consider the following product to be so priced so low that you would feel the quality couldn't be very good ?
- Good value: At what price would you consider the following product to be a bargain - a great buy for the money?
- Getting expensive: At what price would you consider the following product to be starting to get expensive , so that it is not out of the question, but you would have to give some thought to buying it?
- Too expensive: At what price would you consider the following product to be so expensive that you would not consider buying it?
These are the only questions used in the pricing analysis and must all be included.
Pricing Exposure Guideline:
- Respondents must not be exposed to any pricing information prior to answering the Van Westendorp pricing questions. This includes prices shown in concept / product stimuli, suggested retail prices, or price ranges elsewhere in the survey.
- Unpriced purchase intent questions may be included, as long as no pricing cues are provided.
Adding Van Westendorp Module to a survey
- To include the Van Westendorp methodology in your survey, add the 'Van Westendorp Pricing' question module from the Question Library when building your survey
- Once added, select the 4 core pricing questions and add all questions to a group using '' Create Group' button at the top
- Toggle on “ Show on same page” & ensure “ Randomize questions” is toggled off
- (Optional) Add unpriced concept or pack shot to the first question in the series if relevant
Understanding the Analysis (Price Response Curves)
Example Output
Once responses are collected, we plot cumulative response curves to generate the standard Van Westendorp intersections:
| Key Point | Definition |
|---|---|
| Point of Marginal Cheapness (PMC) | Where “Too Cheap” and “Expensive” curves intersect – the lower bound of the acceptable price range. |
| Point of Marginal Expensiveness (PME) | Where “Too Expensive” and “Bargain” curves intersect – the upper bound of the acceptable price range. |
| Optimal Price Point (OPP) | Where “Too Cheap” and “Too Expensive” curves intersect – where the fewest people reject the price. |
| Indifference Price Point (IDP) | Where “Bargain” and “Expensive” curves intersect – where perceptions are most neutral. |
Highlight calculates these intersections and visualizes them so you can:
- Understand the price range that feels reasonable to consumers
- Pinpoint the price that balances value and risk perception
- Compare pricing tolerance across different consumer segments or product versions
Van Westendorp Pricing Outputs – Scope & Delivery:
- The analytical output (Van Westendorp Price Response Curves) are not automatically included and must be scoped and purchased as an add-on utilizing additional Highlights.
- Outputs are provided to you by a member of our Customer Enablement team via Powerpoint, and do not live within the Highlight platform.