Price sensitivity plays a crucial role in pricing strategies as it evaluates the product's real value and provides insight into the customers' readiness to purchase. It allows businesses to forecast sales volume more accurately. High price sensitivity indicates that customers consider the product overpriced, while low price sensitivity suggests that a higher price will not negatively affect customers' willingness to buy. Most importantly, understanding price sensitivity enables businesses to set optimal prices across their product line and influence customer behavior through specials, discounts, and other marketing techniques.
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