Raising prices or holding market share: The pricing dilemma facing every business

Should we raise prices to cover costs, or hold steady to protect market share? This pricing dilemma is keeping every Australian B2B leaders awake right now. With household budgets tightening and input costs rising, pricing has once again taken centre stage. The Reserve Bank of Australia expects inflation to stay above target until mid-2026, while wage growth is beginning to slow, leaving businesses facing uneven demand patterns and the margin for pricing errors smaller than ever. 

But here’s what we’ve learnt at Fifth Quadrant: most pricing problems aren’t actually pricing problems. When companies lose deals on price, the real issue is often that customers don’t see why their solution is worth more than the alternative. They’re not rejecting the price, they’re rejecting the value proposition. 

The companies getting this right have stopped treating pricing as a cost-recovery exercise. They’re asking a different question: What are our customers actually buying from us, and what would they pay for more of it? 

Understanding how customers perceive value, and what they’re truly willing to pay, has become a competitive advantage for both B2C and B2B organisations. Market research plays a critical role in getting that clarity. 

Pricing dilemmas: How to Make Better Pricing Decisions Through Research 

There’s no one-size-fits-all approach to pricing research. The right mix of methodologies depends on the market, category, and decision at hand. Here’s how to match the research method to the business question you’re trying to answer. 

• When you need to understand what’s happening at point of sale: mystery shopping and retail audits uncover how price points are being implemented in real-world settings and how competitors are reacting. Use these when you suspect a gap between your pricing strategy and its execution, or when you need competitive intelligence before making your next move. 

• When you’re hearing “too expensive” but don’t know why: qualitative research, such as focus groups or in-depth interviews, helps unpack the “why” behind price sensitivity. What drives perceptions of fairness or value? What trade-offs are customers really making? In a B2B context, price objections are often about risk, switching costs, or trust, not the number on the invoice. What looks like price sensitivity can be customers questioning whether your premium features still justify the cost difference against newer, lower-priced competitors. 

• When you need to know if you’re leaving money on the table: Quantitative methods put structure around those insights. Pricing frameworks measure willingness to pay and identify acceptable price ranges. Use these when you suspect your pricing has drifted from market reality, either because you’re undercharging or you’ve crossed into “too expensive” territory without realising it. These methods provide the evidence needed to underpin strategic decisions like when to adjust list prices or where to position premium offers. 

Conjoint Analysis: Turning Complex Trade-Offs Into Action 

When decisions get more complex, look to conjoint analysis. It’s a research technique that simulates real-life trade-offs, helping predict how customers might react to different price and feature combinations. 

Use conjoint analysis when making complex pricing decisions:

• Should you offer a low base price with add-on services, or a higher all-inclusive price?  
• Which product features justify a premium, and which are just table stakes?
• How do you price across different customer segments without leaving money on the table? 

In automotive, we’ve seen established OEMs use this approach to identify which premium features customers value versus those that inflate costs without influencing purchase decisions. This helped them design products around high-value attributes while scaling back investment in over-engineered features, defending market share and stabilising margins against aggressive competitors. 

What makes conjoint analysis particularly valuable is combining stated preferences with actual purchase behaviour, helping validate findings and build confidence in pricing decisions. 

Why Pricing Insights Drive Growth 

Well-designed pricing research helps leaders anticipate the ripple effects of their decisions across the supply chain, from raw materials to retail shelves, from supplier negotiations to end-customer experience. Whether you’re managing a consumer brand adjusting to inflation or a B2B company navigating procurement pressures, data-backed pricing decisions drive resilience and long-term growth. 

The question isn’t whether to change your pricing in today’s volatile environment. It’s whether you’re going to do it with evidence or intuition. 

Want to turn pricing uncertainty into strategic advantage? Our research unlocks the customer insights you need to make smarter pricing decisions today and drive business growth tomorrow. Contact us to learn how we can design a research approach tailored to your business goals.