Price sensitivity, also known as price elasticity of demand, can greatly affect the effectiveness of specials and discounts. If a product has high price sensitivity, customers may perceive it as overpriced, and thus, specials and discounts can significantly boost its sales. On the other hand, if a product has low price sensitivity, a higher price will likely not deter customers from purchasing it, and discounts may not significantly increase its sales. Therefore, understanding a product's price sensitivity can help businesses set optimal prices and effectively use specials and discounts to influence customer behavior.
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