Brand-Price Trade-Off

Brand-Price Trade-Off (BPTO) is a pricing-research technique that measures how consumers trade off brand preference against price by presenting competing brands at varying prices and asking, repeatedly, which one they would buy. In the classic procedure the respondent chooses a brand from a set shown at given prices, and then the chosen brand's price is raised in the next round, forcing successive choices until the respondent switches to a cheaper alternative or to none. The sequence of switch points reveals how much of a price premium each brand can command before customers defect, mapping brand loyalty and cross-brand switching. Developed by British market researchers in the 1970s and conceptually rooted in the price-perception work of Gabor and Granger, BPTO is in effect a constrained, sequential choice experiment focused on brand and price. Modern practice analyzes the resulting choices with a logit model under random utility theory, yielding brand utilities, price elasticities, and a simulator for share under different competitive price scenarios. It remains popular for fast-moving consumer goods where brand-versus-price is the dominant decision.