What price will Indian consumers actually pay for my product?
Answer
The price people will actually pay is the one that still feels fair after they have used your product at home for a couple of weeks. Ask people what they would pay, and they tend to say more than they will really spend. And a small flaw they notice later can make even a fair price feel like too much. So find your price from people who fit your buyer and have lived with the product, and look at how many of them would still buy it at each price you are weighing.
Illustrative, from our sample report (a fictional brand). A new serum is planned at ₹649. After two weeks of use at home, 23 in 100 people would still buy it at that price and 62 in 100 at ₹399, so the higher price earns about 40 percent less.
The price people name runs high
Saying a number costs nothing, and the product hasn’t had a chance to disappoint yet.
Across 77 studies of consumer goods, the price people said they would pay was on average 21 percent higher than what they paid when real money was involved. (Schmidt and Bijmolt, Journal of the Academy of Marketing Science, 2020) A price set from those first answers starts too high before the product reaches a single home.
The price has to survive real use
What a product seems worth on the first day can change once people have used it for a while.
People can like a product and still find one thing wrong with it. In a home-use study of a hot sauce with 207 people, at least half rated every quality they were asked about “just about right”, yet 42 percent found it too thin. (Foods, 2024) The study didn’t ask about price. But a flaw like that rarely shows on day one, and once someone has noticed it, the same price can start to feel like too much.
A few rupees can decide a sale
A wrong price is costly, and slow to undo.
A listed Indian snack maker earned 75 to 83 percent of its revenue from ₹5 packs between FY2021 and FY2023, and its own filing says that raising the price or cutting the grams could both lose consumers. (Gopal Snacks draft IPO prospectus) So get the price right before the MRP goes on the pack.
A useful answer is a few prices side by side
For each price you are weighing, you want to know how many people would still buy, and the money that brings in.
That is what the serum at the top shows: the planned price didn’t make up for the buyers it lost. A good answer also says when two prices are too close to call, so you choose between them on margin, not on noise.
Who should answer
People who fit your buyer and have actually used the product, not your friends, staff or existing fans.
Their answers count only if they really received the product and used it in their own routine, and they should gain nothing by giving a kind answer.
What this means for your brand
Set your price after real use, not before it. Before you print the MRP, list on a new platform or plan a launch discount, find out what people who have used the product would still pay. The sample report shows what that answer looks like.
Sources
- Schmidt and Bijmolt, Journal of the Academy of Marketing Science (2020) (opens in a new tab), willingness to pay for consumer goods.
- Torán-Pereg and others, Foods (2024) (opens in a new tab), home-use study of a hot sauce.
- Gopal Snacks draft red herring prospectus (2023) (opens in a new tab), risk factor 7.
- Foydy sample report (fictional brand, illustrative numbers).