Price sensitivity can be incorporated into a product's value proposition by understanding the customer's willingness to pay for the product. This can be determined by dividing the demand quantity by the percent of change in price. This gives an insight into the customer's price sensitivity. Based on this, the product's value proposition can be adjusted to match the customer's perceived value and their willingness to pay. For instance, if customers are highly sensitive to price changes, the value proposition could emphasize affordability or value for money.
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To determine how sensitive your customers are to your prices, you need to divide demand quantity by the percent of change in price. The difference is your customer's price sensitivity. PMs will often introduce discount codes to check conversion on a decreased price to determine their customer's price sensitivity. (Slide 9)
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