Question

What strategies can be used to reduce the price sensitivity of a product?

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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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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