Answers page
From time-to-time we are asked to clarify items on the web site, or to add more detail for specific problems. Since this information is often of general interest, we include the answers to the queries here.
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A1. Gabor-Granger Pricing
The Garbor Granger approach captures a range of of styles of pricing research. The basic technique tends to look at one product in isolation (so yes it is monadic - you could build designs with two stages and matched samples each with rotated pricing order, but if you are really interested in understanding price across a range of products, you're better off with Brand-Price trade-off techniques or conjoint analysis).
There are a number of ways of carrying out the research - you can ask about a concept describe a product in detail or provide suitable stimulus material. It is generally believed that the more "real" the product the more accurate the outcome.For the product/concept you then present the respondent with a price for that product (As the first pricepoint sets a point of comparison for the next set of prices this point is often set at random or based on "expected" price level gathered from the respondent earlier. In practice most studies start at a pre-determined price point). The respondent is then asked how they would respond. The precise wording of this question depends on the agency and the researcher - there is no "standard" as such. It could be as simple as "Would you buy X at this price?", or it could be "How likely are you to buy?" or "Would you be willing to pay Y for X?"
The respondent is then shown another price. Again there are variations here as to how to arrive at a different price. Some people continue purely at random, irrespective of what the respondent has said before, others will increase or decrease the price dependent on whether the respondent said they would or wouldn't buy respectively. You can increase or decrease at random but the fastest method is an approach of looking at midpoints by halving the difference each time.
Across the sample as a whole you get a demand curve (or response curve) showing the percentage of respondents who would buy/try at each price point. However, the key is to look at the *revenue curve* plotting revenue (ie price x number or % of people willing to pay) against price as this should have a turning point where maximum revenue can be gained (unless the product really bombs and so no-one will pay anything for it).At this point you have a reasonable estimate of what the market will bear in terms of price. Take some care about the sample as pricing work tends to be looking at small variations and so requires relatively high degrees of statistical accuracy (and so larger sample sizes).
Knowing what the market will bear still leaves you with the problem of the pricing strategy (do you aim at the maximum, or aim to come in with a "value" proposition"? Do you have to enter a market with a particularly low price to overcome switching costs and inertia? What will the competitive reaction be? Are you in a price leadership or follower role in the market? Can you actually increase prices without causing dissatisfaction among customers?).
A2. Metal castings trade bodies
We have some experience in looking at the steel industry. There are a variety of metals trade bodies in the UK. The main trade association seems to the Confederation of British Forgers. There is a Castings Development Centre in Sheffield and also a number of Engineering associations - eg the Engineering Council, the Engineering Employers Federation, the Institute of Materials (London) but these may be too general. You might also consider the Machine Tools Technologies Association.
Alternatively, the main supplier of steel in the UK is Corus (was British Steel and Hoogovens), based in Newport in Wales - they account for 50%+ of steel bought in the UK and would probably be able to provide information about who and where to go for information. You might also consider contacting BSD (was British Steel Distribution, but they are run as a separate business and also distribute other steels), they have many offices across the UK, but I think the main one is also in Newport, Wales.
You might also try the UK government's website and the Department of Trade and Industry (DTI) pages.
If you're looking to find engineering firms that might use your products, you might find that Kompass will provide a list of suitable names as this lists companies by products.