Case Study: Pricing Strategy for a New Premium Hair Serum
Leonardo Gonzalez
Price Sensitivity Analysis for Doctor-Formulated Hair Serum
The Challenge
A fast-growing beauty brand was preparing to launch a doctor-formulated hair serum designed for Gen Z and millennial women seeking fuller, stronger, and healthier hair.
The brand faced a key challenge:
Price too low, and they risked undermining the premium positioning of their clinical formula.
Price too high, and they risked alienating budget-conscious younger shoppers.
They needed clear, data-driven insights to set a launch price that balanced perceived value with accessibility.
Approach
To answer this question, I conducted a Van Westendorp Price Sensitivity Analysis with 250 women in the target demographic.
Steps in the research process:
Survey Design: Created a targeted survey featuring professional mock-ups of the 1 fl oz serum, highlighting its unique doctor-formulated benefits.
Price Testing: Respondents answered four key pricing questions (too cheap, bargain, expensive, too expensive).
Analysis: Applied Van Westendorp methodology to identify the optimal price point, point of indifference, and acceptable price range.
At what price would this product be so cheap that you'd question its quality?
At what price would this product be a great deal for the money?
At what price would you think the product is getting expensive, but still worth considering?
At what price would this product be too expensive to buy?
Key Insights
The analysis revealed:
Optimal Price Point: $20.40 (the price most customers felt comfortable with).
Point of Indifference: $22.74 (where perceptions of “cheap” and “expensive” balanced).
Acceptable Price Range: $18.86 – $29.48.
These findings showed that customers were willing to pay above $20 for the product without perceiving it as overpriced, reinforcing the serum’s premium positioning.
Recommendations
Launch at or near $20.40 to maximize perceived value and competitive positioning.
Offer introductory promotions closer to $18.86 to attract first-time buyers.
Explore premium pricing opportunities (up to ~$29.50) for limited editions, bundles, or future product extensions.
Impact
By grounding their pricing decision in customer-driven data, the brand gained confidence in setting a launch price that:
Preserved its premium identity.
Remained accessible to Gen Z and millennials.
Provided a scalable framework for future product launches.
The results armed the marketing team with not just a number, but a pricing strategy that could flex over time, balancing growth, positioning, and profitability.
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Posted Jun 3, 2025
Pricing analysis helped a beauty brand find the optimal price for a new hair serum, balancing value, access, and premium positioning
