Price Laddering Sized the Market Potential
Business Challenge
A pharmaceutical company was developing a new prescription dermatological drug that was unlikely to be covered under most insurance plans. It wanted to determine the level of consumer interest and the price point that would drive consumers to ask their physician about the drug.
They also wanted to know how the severity and anatomical location of the condition, among other factors, affected interest.
TRC’s Solution
In an online survey, the new drug concept was shown to adults with a specific condition. Respondents indicated their likelihood to inquire with their physician about the drug at the stated price.
A Price Laddering exercise exposed those who were not interested at the stated price to two lower prices, while those who were interested at the stated price were asked about two higher prices.
In total, five price points were tested to determine the highest price at which respondents would inquire about the drug with their doctor.
Interest was then broken down by condition factors and demographics along with the different price points to determine market size and potential.
Successful Results Implementation
- The research identified groups of consumers who were more interested in the product and willing to pay more out-of-pocket than other groups.
- This helped the client size the potential market as well as guide the direction of their marketing plan.
