For a number of years there has been a push by the software vendors towards a “subscription” pricing model for software licensing as opposed to the historically dominant “perpetual” license. However, after a number of years of seeing increases in the number of software vendors offering subscription pricing models, there has been a decline of 8% in 2006 relative to 2005 . . .  <more>

CISTEK Q&A
Question: What is "Conjoint Analysis" and is it an applicable technique for pricing research?
Answer: Conjoint Analysis is a popular marketing research technique used to measure the trade-offs people make when choosing which products or services to buy. The power of the technique is that once data has been collected via questionnaires and analyzed, simulation can be used to test the market's response to various mixes of product attributes including price. Pricing demand curves and elasticity can be quantified using the results of a conjoint analysis. Surveys can be constructed to identified brand-price preferences which when analyzed can yield measures of brand premiums for various competitors.

While conjoint studies are easier to run when you are considering a single product or an enhancement to a solution, Cistek consultants partition the features of complex solutions into two classes: differentiators and "me too"s. In this way, the attributes of differentiators can be isolated resulting in meaningful pricing measures.

Limited sample size always presents unique challenges to statistical research. However, conjoint studies can be performed on small sample sizes. The Cistek Group has developed a technique called 'Expert-based Conjoint" where a small number of internal and external market experts are surveyed to develop ranges of market preferences. Monte Carlo simulation is then used to create random samplings of the market. This technique is especially useful when it is impractical or not cost-effective to survey large numbers of people. If you would like to learn more about Expert-based Conjoint, contact The Cistek Group.