Regression Analysis and Pricing Research
Description of How it Works
- In the initial stages of the project often the time required to collect the appropriate data is underestimated and the availability of quality data is overestimated. These circumstances can jeopardize the successful completion of the project.
- In our experience we have found that regression analysis is worth exploring as a pricing research methodology under the following conditions;
- Data rich industry
- Stable category
- Mature market
- Competitive product insight and data
- We have found that this pricing research methodology is not effective when;
- Disruptive changes occur (e.g. new competitive entrant, new technology)
- Lack of competitive sales or market share data
- Data only accessible at a highly aggregated level
Mulhern, F.J. and R.P. Leone, Measuring Market Response to Price Changes: A Classifi cation Approach. Journal of Business Research, Vol. 33, pp. 197-205.