How can price sensitivity be incorporated into a product's value proposition?

Price sensitivity significantly influences promotional strategies. If customers are highly sensitive to price changes, businesses may use promotional strategies such as discounts, sales, or special offers to attract customers and stimulate sales. On the other hand, if customers are less sensitive to price, businesses might focus more on promoting the quality, features, or benefits of their products or services. Understanding price sensitivity can help businesses tailor their promotional strategies to meet their customers' needs and preferences, and ultimately drive sales and profitability.

Price sensitivity has a direct impact on sales volume. If customers are highly sensitive to price, a small increase in price can lead to a significant drop in sales volume. Conversely, a decrease in price can boost sales volume. However, this depends on the elasticity of demand for the product. If demand is inelastic, changes in price will have less impact on sales volume.