Placeholder study

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Case study - Pricing

Placeholder Coffee Co. can charge 20 percent more without losing demand

Van Westendorp pricing, with a Gabor-Granger ladder. n = 60. United Arab Emirates and Saudi Arabia. Example month.

$24
Optimal price point
$18-30
Acceptable range
$32
Willingness to pay ceiling (mean)
70%
Would still buy at $24

The situation

A speciality coffee roaster had been selling a 250g bag at $20 for two years and had never tested the number. Costs had moved, the team suspected the bag was underpriced, and the founder wanted to go to $24. Nobody in the room could say what $24 would do to volume, so the argument kept resetting.

The decision was worth roughly one quarter of gross margin and needed making before the next roast cycle, which ruled out a four week panel study. The brief was narrow on purpose: find the price the market accepts, and find the point where demand falls off a cliff.

Price sensitivity

What the market will pay

Gabor-Granger
$18
54 · 90%
$21
48 · 80%
$24
42 · 70%
$27
27 · 45%
$30
15 · 25%

The demand ladder: the share of the sample who said they would still buy at each price. n = 60, authoritative posture. Demand holds through $24 and then drops 25 points between $24 and $27, which is where the ceiling sits.

What respondents said

Q1 - Rating scale, 1 to 10

How likely would you be to buy a 250g bag at $24?

Rating scale, 1 to 10 - n = 60
VETT READThe distribution is single peaked at 8, not split. That matters more than the mean: a bimodal curve would mean two audiences with two different prices, and there is only one here.
1
2
3
4
5
6
7
8
9
10
LowerEach column is one point on the scaleHigher
Q2 - Multi select

What makes a bag of coffee worth paying more for?

Multi select - share of 60 respondents
VETT READProvenance and freshness outrank packaging by more than two to one. The premium is a story about the bean, not about the bag.
Single origin with a named farm
39 · 65%
Roasted within the last week
33 · 55%
Tastes better than the supermarket bag
27 · 45%
Recyclable or refillable packaging
18 · 30%
A brand I already know
12 · 20%
Q3 - Open text

In your own words, what would stop you paying $27 for a bag?

Open text - themes across 60 responses
Cheaper alternative on the supermarket shelfnegative24 / 60
Wants to taste it before committingneutral18 / 60
Happy to pay for freshnesspositive15 / 60
“I buy coffee every fortnight, so an extra four dollars a bag is about a hundred dollars a year. I would pay it if the bag actually tasted different.”
Synthetic respondent. Generated, not collected from a person.
“Twenty four is the number where I stop thinking about it. Twenty seven and I start comparing.”
Synthetic respondent. Generated, not collected from a person.
“The roast date on the bag does more for me than any of the branding.”
Synthetic respondent. Generated, not collected from a person.

Who answered

Weekday commuters40%

Buy a bag every two weeks, brew at home before the office, price aware but not price led.

Home brew hobbyists35%

Own a grinder and a scale, read roast dates, least sensitive group in the sample.

Gift buyers25%

Buy three or four times a year for someone else, anchor on packaging and on the story.

What this number can carry

Above the statistical gate

n=60. Above the n>=30 threshold VETT requires before headlining a price point.

VETT respondents are simulated, not recruited. Read this as evidence about direction and ranking, and see how VETT produces a number for where each figure stops being reliable.

$99. About 12 minutes.

That is what this study cost and how long it took, start to finish. Yours runs the same way.

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