Van Westendorp vs. Gabor-Granger: Which Pricing Research Method Should You Use?

Have you ever wondered how to strategically determine the right price for a product? It can feel like a Goldilocks problem: too high and customers walk away; too low and you leave money on the table. That’s where pricing research comes in. Before diving into specific methods, let’s ground ourselves in the basics and understand how pricing research supports a stronger pricing strategy.

Understanding Pricing Research Methodologies

What’s Pricing Research & Why Does It Matter?

Your price point can make or break a product’s success. Set it too low, and customers may question your quality; set it too high, and they may question your judgment. Pricing research is the practice of collecting customer feedback to inform a smarter, more strategic approach. It’s primarily a quantitative method because it relies on structured questions, numerical thresholds, and statistically significant sample sizes. However, it can be informed by qualitative insights.

Strong pricing research enables you to strike the right balance between perceived value and profitability, ultimately turning your price tag into a competitive advantage.

Common Pricing Research Methods Used Today

Market research firms like Campos use several well-established methodologies to evaluate what customers are willing to pay. Here are some of the most common pricing research methods used today:

1. Van Westendorp Price Sensitivity Meter (PSM): A survey-based method that asks consumers to identify the price they consider too cheap, a bargain, expensive, and too expensive. This approach reveals the acceptable price range and the perceived Optimum Price Point (OPP) based on consumer attitudes.
2. Gabor-Granger: This method presents consumers with a series of specific prices and asks whether they would purchase at each one. By measuring purchase intent across different price points, you can build a demand curve and pinpoint the price that maximizes revenue.
3. Conjoint (Discrete Choice) Analysis: A more advanced technique where price is one attribute tested among many. Consumers choose between different product configurations, and statistical modeling isolates the value placed on price relative to other features. Conjoint is powerful for simulating real-world trade-offs but is more complex than direct pricing questions.
4. Willingness-to-Pay Surveys: A straightforward approach that asks, “How much would you pay?” While easy to execute, these responses can lack accuracy. People tend to guess how they think a product would be priced rather than take the time to reflect on what the product is actually worth to them.

Each of these methods has its place, and there’s no concrete method for determining which method to use. In this blog, we’ll focus on two of the most widely used tools—the Van Westendorp PSM and the Gabor-Granger technique—and explore how they compare so you can make an informed decision.

How the Van Westendorp Model Works

The Van Westendorp model uses four questions, typically shown on one survey page, to get people thinking about your product at different price levels. Seeing all four at once helps respondents answer logically from low to high. The questions represent four price perceptions:

1. “Too cheap”: When the price is so low, it triggers distrust. If someone says $5 is too cheap, anything below that screams, “What’s wrong with it?” Responses to this question show the floor that you must price above to avoid these negative perceptions.
2. “Acceptably cheap”: When the price is low enough to be exciting without triggering the assumption that corners were cut, it feels like a great deal. Think of it as the consumer’s ideal low price.
3. “Acceptably expensive”: When the price starts to sting, but people are still willing to shell out for it. If many say $50 is getting expensive, you’ve found the upper comfort zone. Customers may hesitate, but will likely still buy.
4. “Too expensive”: This is the hard stop. Above this price, most people simply won’t buy. It sets the ceiling for what your market will tolerate.

Once respondents enter these four prices, you aggregate the data and plot four curves; the magic happens where they intersect:

• The acceptable price range sits between the intersections of the “too cheap” and “too expensive” curves; the zone where the price doesn’t raise red flags on either end.
• The OPP often appears where both acceptable curves intersect, where roughly equal numbers of people feel the price is still a good deal and is starting to get pricey. That balance creates a strong signal of what feels just right.

Advantages & Limitations of the Van Westendorp Method

Like any research method, the Van Westendorp PSM has its strengths and weaknesses. Here’s the quick breakdown:

Van Westendorp Strengths:

• Customer-driven pricing insights: Van Westendorp lets customers define what feels cheap, fair, and expensive, giving you a baseline of what people actually think your product is worth.
• Quick and cost-effective: It uses only four questions, making it easy to run and great for early pricing direction without heavy setup.
• Reveals price–quality perception: If many people say a low price feels “too cheap to trust,” it highlights a perception or credibility issue, not just a number.

Van Westendorp Limitations:

• No direct demand or revenue prediction: It shows which prices feel acceptable, but it doesn’t tell you how many people would actually buy at those prices.
• Inconsistent responses for new products: If your product is unfamiliar, responses can vary widely or be out of line with realistic costs. Additional research may be required.
• Stated intentions vs. real behavior: People say what they think they’d pay, but real purchase behavior can differ. Both pain points or impulse can push them higher or lower.

How the Gabor-Granger Method Works

The Gabor-Granger method zeroes in on each person’s maximum willingness to pay by walking them up or down a series of price points. Instead of asking people to guess what they’d pay, it tests real reactions to actual prices one at a time. Here’s how:

1. Start with a Price: The survey begins with a single question: “Would you buy this product at $X?”
   • If the respondent says Yes, the next question shows a higher price.
   • If they say No, the next question shows a lower price.
2. Apply Adaptive Logic: This Yes/No staircase continues until you find the respondent’s breaking point, where they switch from Yes to No (or vice versa). That’s their personal price ceiling or floor.

By the end, each respondent has revealed their highest or lowest acceptable price. When you combine all responses, you see what percentage would buy at each price—data that forms a demand curve showing how purchase likelihood falls as prices rise.

Advantages & Limitations of the Gabor-Granger Method

Gabor-Granger is a powerful approach, but like the Van Westendorp PSM, it has its strengths and weaknesses. Let’s outline them:

Gabor-Granger Strengths

• Finds the revenue-maximizing price: Gabor-Granger shows how demand changes as price increases, helping you pinpoint the price where revenue is highest.
• Clear, quantitative demand insights: You get hard numbers on what percentage of customers would buy at each price. This lets you build a demand curve, estimate elasticity, and model “what if” scenarios.
• Structured, easy-to-analyze data: Because people react to specific price points, the data is clean and straightforward.

Gabor-Granger Limitations

• Doesn’t reveal perceived “fair price”: It shows what people would or wouldn’t pay from the options you give, but not what they feel is fair. If you miss the true price zone, you won’t see it.
• More complex survey design: It requires well-chosen price points and multiple sequential questions, which makes it longer and costlier to run and increases the risk of respondent fatigue.
• Potential bias and missing context: It doesn’t factor in competitors. Someone might pay $100 unless they know a competitor sells for $80.

A Summary of Key Differences: Van Westendorp vs. Gabor-Granger

We’ve explored each method separately; now let’s compare Van Westendorp and Gabor-Granger head-to-head. Both are valuable tools, but they serve different purposes and yield different types of insights.

Aspect	Van Westendorp PSM	Gabor-Granger
Question Format	Open-ended price thresholds All four questions shown together Respondents consider the full range at once	Closed-ended yes/no or likelihood questions One price per screen Skip logic adjusts price up/down based on prior answer
Primary Output	Acceptable price range Perceived optimal price point  Insight into price perception and value	Demand curve (% who’d buy at each price) Revenue curve to find the revenue-maximizing price Quantitative price elasticity and predicted purchase rates
Best For	Exploratory pricing for new products Situations with unclear market expectations Understanding consumer psychology	Optimizing pricing for existing products Forecasting sales at specific price points Data-driven pricing decisions for a single product
Advantages	Simple and fast to run Directly reveals price expectations and quality perceptions Helps avoid prices perceived as too low or too high	Provides demand expectations at specific price points that can be used in other financial modeling Identifies revenue-maximizing price Clear insight into demand sensitivity and price change impact
Limitations	No actual purchase probabilities or revenue prediction Assumes people can accurately self-report thresholds Data can be ambiguous if responses vary widely	Only as good as the tested price points Survey can be longer or more complex Respondents may understate willingness to pay No competitive context; product evaluated in isolation

Choosing the Right Pricing Research Method for Your Product

Selecting the best approach depends on your product type, market dynamics, budget, timeline, and the kind of data you need.

Product Type & Market Considerations

The nature of your product and the market you’re operating in can heavily influence whether Van Westendorp or Gabor-Granger is appropriate:

New vs. Existing Products

• New or innovative products: Start with Van Westendorp. When benchmarks don’t exist, it helps reveal customer expectations and broad willingness to pay.
• Established products: Use Gabor-Granger to measure how specific price changes impact demand. Ideal for optimizing or revisiting an existing price point.

Category Dynamics & Perceived Value

• Premium and luxury markets: Use Van Westendorp to understand price-quality dynamics. It helps avoid underpricing, which can harm brand equity.
• Price-sensitive or commodity categories: Use Gabor-Granger; small price changes can significantly impact volume, making precise demand curves essential.

Competitive Landscape

• Clear competitor pricing: Van Westendorp can confirm expectations already shaped by the market. Gabor-Granger tests whether you can justify moving above or below the norm.
• Unclear or inconsistent competitor pricing: Both methods become especially valuable because they give you direct feedback from customers that competitor analysis alone can’t provide.

The Case for Using Both Van Westendorp and Gabor-Granger

It’s not always a matter of choosing one or the other. In many cases, using both sequentially can be the smartest strategy. In fact, some researchers recommend starting with Van Westendorp to get the lay of the land, then zooming in with Gabor-Granger for precision. Here’s how a combined approach might work:

1. Use Van Westendorp to Explore: Map the acceptable price range and perceived “sweet spot.” This gives you the guardrails and eliminates guesswork.
2. Use Gabor-Granger to Refine: Use the Van Westendorp range to choose specific price points for Gabor-Granger testing. Now you know what feels acceptable and drives revenue.
3. Combine the Insights: This gives you both perception and performance metrics,allowing you to make an informed strategic decision: price near $X for easier adoption, price near $XX for higher revenue per sale, or split the difference.

A Research Partner for Your Pricing Methodology

If you’re new to pricing research or ready to elevate your current approach, our team is here to help. Campos utilizes a comprehensive suite of quantitative methodologies, including Gabor-Granger and Van Westendorp, to help inform pricing decisions. Whether you’re determining the optimal price for a new product or evaluating the effectiveness of your current pricing strategy, we provide the data and insights you need to move forward with confidence.

Reach out and let’s talk pricing!