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Optimal Price in CBC

Hello, We are doing a CBC pricing study in which we have 5 price levels (-10%, -5% , Base Price. +5% and +10%). We would like to know the optimal price of any configured product in conjoint simulator. Any advice would be really appreciated.
asked Mar 28, 2017 by anonymous

1 Answer

0 votes
First, you have to define what "optimal" means.  If it means "share maximizing," then the choice is easy:  the -10% price point will likely be the one that maximizes share.

More likely you'll want "optimal" to mean something like "revenue maximizing" or "profit maximizing," and you might mean either for the product as a standalone or in the context of a portfolio if you have a portfolio of products in the category.

Optimization searches to identify these optimal products are available in Sawtooth Software's SMRT simulator but you could probably also program a search for them into an Excel simulator using the Solver capability.
answered Mar 28, 2017 by Keith Chrzan Platinum Sawtooth Software, Inc. (62,500 points)