What are the rules for prices in Brand-Price Trade-Off experiments?

When you are setting up a Brand-Price Trade-Off experiment, there are a few rules to keep in mind:

  1. You need to ensure that there are at least 3 price points per SKU
  2. Each price point needs to be shown for at least 2 SKUs
  3. There must be no gap between price points for any one SKU.

If any of these rules are not followed, there will be error messages letting you know, and you will not be able to save the experiment unless your Brand-Price Trade-Off price set up is correct.

To fulfil the three criteria above, we recommend doing the following:

Extend the price ranges of some SKUs for all price points to be shown for at least 2 SKUs (Rule 1 and 2)

It is fine to show more prices above or below the base price in the choice experiment, when you go to perform analysis you can simulate products only at their appropriate price points.

BPTO Rules 1

Fill in the gaps between price points by clicking on the Fill Gaps button (Rule 3)

You will get more granularity in simulation results by doing this.

BPTO Rules 2

You can also merge very similar prices by clicking on the Merge them? button

This helps to reduce the number of unique price points.

Additionally, you may want to reduce the total number of tested prices by manually merging other price points. For example, instead of testing $10, $11, $12, $13, $14, $15, $16 you can test only $10, $12, $14 and merge $11, $13, $15 to either the next higher or lower price point. The reason you can do this is that price is treated as a numerical variable in the Brand-Price Trade-Off so you can simulate the prices in between later on. This approach will reduce the number of responses recommended as this is estimated based on the number of price points in the Brand-Price Trade-Off set-up.

BPTO Rules 3
Note: The number of responses recommended will stay the same if you increase the number of price points tested in each SKU without increasing the number of overall price points.