Pricing Research to stay Ahead in the Rapidly Expanding Southeast Asian Market

The rapidly Expanding Southeast Asian market Gaining Global Attention

In the global business landscape, the Southeast Asian market is drawing attention worldwide as a rapidly developing region with a young consumer base.
Understanding retail trends in the Southeast Asian market is beneficial and crucial for retail, manufacturing, and distribution businesses. This article will delve into the necessity of pricing research in this market and how companies can effectively utilize the findings.

Changing Purchasing Methods and Logistics Infrastraucture

The rising income levels in recent years have led to an increase in smartphone ownership, urbanization, and internet usage, which has, in turn, boosted e-commerce adoption. According to Statista data, the Southeast Asian e-commerce market is expected to reach approximately $159 billion in 2024 and continue to grow.

With this expansion, the demand for logistics infrastructure capable of efficiently managing product deliveries, order processing systems, and customer service has become increasingly important.
Moreover, due to global inflation and rising costs, not only online stores but also brick-and-mortar businesses are experiencing price hikes in product lineups, distribution, and labor expenses. This situation has made pricing strategy adjustments an urgent challenge for store operators.

While some logistics costs can be mitigated through artificial intelligence (AI) and digital transformation (DX), setting an optimal price requires competitive and market trend analysis. This is where pricing research becomes valuable.

Overview, Advantages, and Disadvantages of Pricing Research

What is Pricing Research?

Pricing Research is a process conducted to determine whether a product or service is priced appropriately. It helps businesses understand:

• The price range customers are willing to pay
• Purchasing motivation and psychology
• The impact of pricing on brand perception

This research is crucial for setting prices for new products or services, adjusting existing prices, and developing competitive differentiation strategies. Given the diverse customer base in the expanding Southeast Asian market, conducting pricing research is essential.

Insights Gained from Pricing Research

1. Identifying the Optimal Price:
• It helps identify a price range that consumers find valuable and affordable.
2. Measuring Price Sensitivity:
• It helps understand how price changes affect consumers' purchasing behavior.
3. Competitive Analysis:
• It investigates the market and competitors' pricing strategies and provides hints to gain an advantage in the market competition.
4. Maximizing Revenue:
• It enables price adjustments to boost sales and increase profits.

Pricing Research Methods

1. Direct Surveys: Inquiring about consumers’ willingness to purchase and their ideal pricing.
2. Price Sensitivity Models (Van Westendorp Method): Analyzing price perception and purchase intent.
3. Competitive Analysis: Investigating competitors' pricing strategies.
4. Experimental Methods (A/B Testing): Testing different price ranges to evaluate consumer response.

Online surveys are the easiest to conduct, allowing companies to gather extensive data efficiently.

Advantages of Pricing Research for Businesses

1. Optimized Pricing:
• Assists in determining the price range customers are willing to pay.
2. Enhanced Competitiveness:
• Understanding competitors’ pricing and allowing for strategic adjustments.
3. Improved Customer Satisfaction:
• Setting fair prices to enhance perceived value and strengthen brand image.

Challenges of Pricing Research

1. Time and Cost Requirements:
• Conducting research and analysis requires resources, which may burden small businesses. However, online research can reduce costs and shorten the timeline, mitigating this challenge.
2. Dependence on Consumer Responses:
• Customers may provide inaccurate answers or respond in a way that does not reflect their actual purchasing decisions.
3. Market Volatility:
• Rapid changes in the market can quickly render research findings obsolete in a short period.

For businesses to succeed, it is crucial to establish clear objectives and select the most appropriate research method.

Case Study: E-Commerce Market Research Example

Here is an example of a case study focused on research in the e-commerce market.

A baby products company conducted a price study in Southeast Asia to optimize its product lineup and pricing strategy. Their goal was to increase sales through cross-border e-commerce platforms in the region.

Research Objectives

• Compare price differences across competitor e-commerce platforms (A, B, C, D, etc.).
• Understand competitors' pricing strategies within each platform.
• Analyze consumer price sensitivity (i.e., how price influences purchasing decisions).

Research Methods

• Conduct online surveys to understand consumer perceptions of pricing.
• Utilize API data extraction from e-commerce platforms.
• Apply web scraping to collect product prices regularly.

In addition to leveraging platform-specific data collection tools, gathering consumer insights on price perception and brand image is crucial.

By conducting pricing research, businesses can optimize their product pricing, promotional strategies (discounts, coupons), and pricing approaches for each e-commerce platform.

Example of Online Pricing Research

Online surveys for pricing research are designed to achieve the following objectives:

1. Understanding Market Pricing (Competitive Pricing Research)
2. Assessing Consumers' Price Acceptance (Willingness to Pay)
3. Balancing Price and Value Perception

Below are example survey questions tailored to each objective.

1. Understanding Market Pricing (Competitive Pricing Research)
   
   Questions to gauge competitors' pricing and market expectations:

2. Assessing Consumers’ Price Acceptance (Price Sensitivity & Purchase Intent)

         Questions to determine the price consumers are willing to pay:

3. Balancing Price and Value Perception (Price Evaluation)

         Questions to explore whether customers perceive the price as fair:

Pricing Research is Key to Success in a Dynamic Market

Online research is a practical approach for smartphone users due to its low cost, fast data collection, and high response rates.
By carefully designing survey questions, businesses can conduct detailed pricing research efficiently.

Z.com Engagement Lab: Your Partner in Online Research

At Z.com Engagement Lab, we support businesses in conducting successful online surveys.
Our Asia Cloud Panel connects businesses with over 65 million real consumers across 16 Asia-Pacific countries.

Leverage the right target audience to maximize your research results!