There are several strategies that can be used to reduce the price sensitivity of a product. First, you can increase the perceived value of the product. This can be done through branding, quality improvements, or adding unique features that are not available in competitor products. Second, you can use pricing strategies such as bundle pricing or volume discounts to make the price seem more attractive. Third, you can target less price-sensitive market segments. Finally, you can use marketing techniques to influence customer behavior and perceptions about the product's value.

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Pricing Strategies

Take the most advantageous pricing approach to increase profitability of your organization. Use our Pricing Strategies presentation to outline factors...

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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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Price sensitivity, also known as price elasticity of demand, is a measure of how the quantity demanded of a product changes with its price. If a product has high price sensitivity, it means customers are very responsive to changes in the product's price. If the price goes up, customers are less likely to buy the product, and if the price goes down, they are more likely to buy it. On the other hand, if a product has low price sensitivity, changes in the product's price have little effect on customers' willingness to buy it. Therefore, understanding a product's price sensitivity can help businesses predict how changes in price will affect sales volume and customer readiness to make a purchase.

Price sensitivity can be used to develop effective marketing techniques by understanding the product's real value and the customers' willingness to purchase. High price sensitivity indicates that customers may view the product as overpriced, while low price sensitivity suggests that a higher price will not negatively impact the customers' willingness to buy. This knowledge allows for the setting of optimal prices across every category in the product line and can influence customer behavior through specials, discounts, and other marketing techniques.

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