Understanding price sensitivity can help in setting optimal prices by providing insights into the product's real value and the customers' willingness to purchase. It allows for more accurate forecasting of sales volume. High price sensitivity indicates that customers may find the product overpriced, while low price sensitivity suggests that a higher price will not negatively impact the customers' willingness to buy. This knowledge can be used to set optimal prices across all product categories and influence customer behavior through specials, discounts, and other marketing techniques.
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