What is consumer price sensitivity?

What is consumer price sensitivity?

Consumer price sensitivity refers to how the price of a product affects consumers' purchasing decisions. High sensitivity means consumers are likely to change their buying habits based on price changes.

How can businesses measure price sensitivity?

Businesses can measure price sensitivity through surveys, analyzing sales data, and conducting experiments like A/B testing to see how price changes affect demand.

What factors influence price sensitivity?

Factors include the availability of substitutes, the necessity of the product, consumer income levels, and brand loyalty.

Can you give an example of a product with high price sensitivity?

Sure! Generic brands of groceries often exhibit high price sensitivity, as consumers can easily switch to cheaper alternatives.