Several factors influence the level of price sensitivity of a product. These include the availability of substitute products, the proportion of the product's cost to the buyer's total income, the degree of necessity of the product, and the frequency of purchase. If a product has many substitutes, buyers are more likely to be price sensitive. Similarly, if the product takes up a large proportion of the buyer's income, they are likely to be more sensitive to price changes. Products that are considered necessities or are purchased frequently also tend to have lower price sensitivity.
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