Pricing and Demand – Innoverce Engineering

Demand and price sensitivity research helps secure global launch of the Rexel Klix®

Summary

• Unique hybrid staple / paperclip product
• Online survey of 1,000 stationery purchasers conducted in 2008
• Price sensitivity assessed by featuring product demonstration and Gabor Granger pricing method
• Product successfully licensed as the Klix® to leading global stationery manufacturer (Rexel, subsidiary of Acco) in 2010 with sales outstripping supply.

Assessing Demand and Price Sensitivity

Innoverce Engineering Ltd designs innovative new product solutions for a range of markets. It designed and manufactured a stationery product prototype that combined the re-usability of paperclips with the secure fastening of staples. It was aimed at users who needed to temporarily fasten documents and maintain a high standard of presentation, in particular business users, such as solicitors and construction professionals. However, it was also felt to have a number of advantages over conventional staples and paperclips, which would appeal to a range of stationery users.

Our client needed to assess the likely demand for the product at various price points. The intention was to license the product to established stationery manufacturers, so it was essential that the research was robust in order to support the presentation of the product to such organisations.

Consultation with Experts and Online Price Sensitivity Survey

Marketwise Strategies’ research involved two main stages:

First, a handful of key figures who had worked for some of the largest global stationery suppliers were interviewed, and one provided a report summarising the market size and structure of the desk accessories sector of the office products market.

We then conducted an online survey of 1,025 stationery purchasers working within SMEs, large commercial companies and the public sector. Respondents were office managers, sole traders, and administrators / clerical staff. Marketwise Strategies worked with a leading global panel provider, to ensure that sampling was robust and that participants were in relevant roles.

The survey was designed in specialist market research software, and included a product demonstration video, enabling participants to view it in action and understand the key features. Pricing questions, based on the Gabor Granger model, were included to enable the calculation of price elasticity of demand, and pinpoint the optimum price point for selling the product.