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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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Price sensitivity (a.k.a. price elasticity of demand) evaluates the product's real value which, in turn, provides an insight into the shoppers' readiness to swipe their cards. Knowing the product's price sensitivity gives the power to forecast the sales volume more accurately. The high price-sensitivity signals that customers consider the product or service unreasonably overpriced. And the low price sensitivity signals that the higher price will most likely have no negative effect on shoppers' willingness to purchase the product. But most importantly, knowing the level of price sensitivity allows to set optimal prices across every category in the product line, as well as influence customer behavior through specials, discounts and other marketing techniques.
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Take the most advantageous pricing approach to increase profitability of your organization. Use our Pricing Strategies presentation to outline factors...
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