Price vs. Quality: What do CBD Customers Value Most?

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Deciding on the balance of price and quality is a challenge for any company when developing a new product line. Will you position yourself as an economy, standard, or premium brand—and will this sell in your targeted customer segments? Depending on the type of market you’re operating in, your customers may value low price over quality—or vice versa—and you may either be charging too much or leaving money on the table.

In a market evolving as quickly as that of cannabis, it’s even harder to understand these dynamics. Brightfield Group and HelloMD recently sought to shed light on preferences of cannabis consumers in a CBD survey with more than 2,400 total respondents. We analyzed their responses by dividing consumers into five different segments, based on their cannabinoid preferences:

  • CBD-dominant
  • Marijuana-derived CBD-only
  • Hemp-derived CBD
  • THCa-dominant
  • THC-dominant users

In part of the survey we asked consumers to rank what is most important to them when purchasing a CBD product: price, quality, effectiveness, concentration of CBD, or consumption method (flower, concentrate, etc.). While consumers across the board were most concerned about a product producing the desired effects, we found surprising divergences between certain segments when it comes to the balance between price and quality.

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On average, users who primarily use THC-dominant products reported that price, the method of consumption, and concentration of THC:CBD were all more important to them than quality of ingredients. CBD-dominant

consumers not only proved to be much less price sensitive, they take both quality and CBD:THC concentration into consideration before thinking about price. Given that these users consistently ranked CBD’s lack of psychoactive effects as its best feature, it makes sense that they are concerned with the ratio of CBD:THC in their products. But why are they considerably more concerned with quality and less price-sensitive than THC-dominant users?

Differing socioeconomic status does not seem to be a culprit: THC-dominant users surveyed do not have a lower income distribution than the other segments. It’s more likely that this divergence in preferences is attributable to differences in the THC-dominant market, and users are simply responding. Products with a high ratio of THC make up the vast majority of the cannabis market—both legal and illicit—and so consumers have many options to choose from. This level of competition puts downward pressure on prices as companies compete for market share, and also pushes them to differentiate their products in innovative ways, giving consumers a range of options. It’s likely THC-dominant consumers are more price sensitive and less concerned with quality simply because they can afford to be, with so many high-quality options on the market.

While the CBD-dominant and CBD-only market has high quality products as well, there are much fewer of them, and these brands are relatively new players in the cannabis market.  In most states, CBD dominant products make up between 3-4% of products being offered through dispensaries. The lack of black market competition also gives CBD product manufacturers an edge, because lower-cost alternatives don’t yet exist. Companies are still developing and finetuning and consumers are still exploring their tastes and preferences as new options become available. Once the market matures and economies of scale lower unit costs and prices, it is likely that CBD consumers will become more price sensitive as well.

In the meantime, this divergence in preferences highlights the need for customer segmentation and positioning in the cannabis market: if you are a CBD manufacturer and your value proposition is having the highest quality ingredients, this will bode well with current consumer base. However, if you are trying to convert THC-dominant users to your product, be aware that emphasizing quality will likely not be sufficient—they will need to be convinced of the superior effectiveness of your product before they are willing to pay a higher price.


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