Price sensitivity, also known as price elasticity of demand, can be used to forecast sales volume by evaluating the product's real value. This provides insight into the readiness of shoppers to make a purchase. High price sensitivity indicates that customers may view the product or service as overpriced, which could negatively impact sales volume. Conversely, low price sensitivity suggests that a higher price will likely not deter customers from purchasing the product, potentially leading to a stable or increased sales volume. Understanding the level of price sensitivity can also help set optimal prices across every category in the product line and influence customer behavior through specials, discounts, and other marketing techniques.
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