Market Research: Foundations to Practice · Pricing Research
Gabor-Granger and Price Elasticity
Where Van Westendorp derives a range, Gabor-Granger works toward something closer to an optimal single price point by directly modeling the trade-off between price and purchase likelihood. This chapter covers how.
The Gabor-Granger technique presents each respondent with a specific price for a product and asks whether they would purchase at that price, then, depending on the response, presents a higher or lower price in a structured sequence, building a purchase-likelihood curve across a defined price range from the resulting pattern of responses across all surveyed respondents.
Key Takeaways
- Gabor-Granger presents sequential prices and asks purchase likelihood at each, building a purchase-likelihood curve across a defined price range.
- Combining this curve with tested prices estimates expected revenue at each level, identifying the price maximizing revenue, not just unit volume.
- Gabor-Granger's advantage over Van Westendorp is its more direct connection to an actual purchase decision framing at a specific stated price.
- Like all stated-preference methods, it still relies on hypothetical purchase intent, so findings should be validated against real-world data when stakes justify it.