Gabor-Granger

Definition: What is Gabor-Granger?

The Gabor-Granger method is a pricing research technique used to determine the optimal price point consumers are willing to pay for a product or service. It measures demand across a range of prices by asking respondents whether they would purchase at each level.

For example, a subscription platform might use Gabor-Granger to assess how many users would subscribe at $5, $10, or $15 per month.

How Gabor-Granger Works

1. Define Price Range: Establish a realistic set of price points to test.
2. Survey Respondents: Ask if they would buy the product at each price level.
3. Analyze Responses: Plot purchase likelihood against price to identify demand curves.
4. Determine Optimal Price: Identify the price that maximizes revenue or reach based on business objectives.

Best Practices for Gabor-Granger

• Use price points that reflect realistic market conditions.
• Randomize the order of prices to avoid bias.
• Combine with qualitative insight to understand perceived value.
• Pair with Van Westendorp analysis for deeper pricing validation.

Common Mistakes to Avoid

• Using too few or too many price points.
• Testing prices outside the realistic purchase range.
• Ignoring competitor pricing and category norms.
• Treating stated purchase intent as actual buying behavior.

Final Takeaway

Gabor-Granger provides a straightforward, data-driven way to identify optimal pricing. By understanding how demand shifts with price, brands can make informed pricing decisions that maximize both customer satisfaction and profitability.