Knowledge of price sensitivity can help in setting optimal prices by providing insights into the perceived value of a product or service by the customers. If a product has high price sensitivity, it means customers consider it overpriced and may not be willing to buy it at its current price. On the other hand, if a product has low price sensitivity, it means customers are willing to pay a higher price for it. This information can be used to adjust the prices accordingly to maximize sales and profits. Furthermore, understanding price sensitivity can also help in forecasting sales volume more accurately and influencing customer behavior through specials, discounts, and other marketing techniques.
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