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What Affects Purchasing Marijuana? A Form of Pricing Research Gave Us the Answer

trust-is-important-in-purchasing-marijuana-pricing-research

As researchers, we are always interested in understanding consumer choices. We ask respondents to rate importance, rank priorities, and trade-off among complex configuration scenarios. We discuss and make our own trade-offs in terms of design simplicity, project cost and informational objectives. And sometimes we try new approaches.

Anyone who reads the news is aware that there is a whole new consumer product category on the horizon: marijuana is now legal for medical purposes in over 30 states and for recreational use in at least 9 of those states (as of this writing). In partnership with NJ Cannabis Media (www.njcannabismedia.com), we took the opportunity presented by this new consideration dynamic to test a new choice evaluation strategy.

Essentially, we were interested in understanding the roles of 4 factors in adult recreational-use marijuana purchase decisions. A constant sum exercise (allocation of 100 “importance points”) among self-reported current and potential users yielded the following priority distribution:

factors-in-marijuana-purchase-pricing-research-1

Looking at this result gives us the impression that marijuana purchasers tend to consider all 4 factors similarly - that they are of rather parallel importance.   

We wanted to know more. Specifically, we were interested in understanding preference intensity.

We decided to follow the importance of the four factors with a simple choice question. We wanted to get closer to a real life scenario where price is inextricably part of any purchase decision. So for the factor that a respondent chose as the most important, we presented him or her with a polarized scenario that had cost incorporated in the choice he or she had to make.  

For example, if the respondent chose trust as the most important factor, we then asked him or her to choose between two options: '1 - The seller I most trust, at a higher cost’ or '2 - A seller I don’t know as well, at the lowest possible cost.'  

The idea was to fold in the price trade-off to go beyond how often a factor is prioritized and essentially assess commitment to a specific factor – would the most important factor still take precedence in the face of a drawback in the form of higher price?

Now we see something really interesting:

weed-at-low-cost-trusted-source-pricing-research-1

•   It’s clear that when trust is considered in marijuana purchase, it’s non-negotiable.  Virtually all of those who considered the “trust vs. price” scenario would pay more for a trusted provider.
•    But other factors are more flexible.  Half would be willing to give up their preferred method for ingesting marijuana if they could obtain an alternative at a lower cost.

By benchmarking consumer priorities against price in a simple “showdown,” we learned something important about the nature of different preferences: while they may be distributed similarly, they are not equally compelling.  

On the flip side, we also gained insights around price sensitivity in marijuana purchasing: it’s not a single dimension but rather a set of sensitivities that vary based on factors against which price is traded off. And all of this was achieved without the kinds of complex full-product configurations we often deploy in assessing choice dynamics.

Is this the optimum strategy for all decision process and price-related research inquiries? Of course not.  But the ability to use a simple query set to understand some complex choice dynamics makes this approach a good option to have in our “research toolbox” as we consider similar learning needs. We’ll be using this method again.

Tagged in: Pricing Research

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