How does price elasticity affect marketing strategies?
An example of an AI chatbot conversation about the impact of price elasticity on marketing strategies.
How does price elasticity affect marketing strategies?
Price elasticity measures how demand changes with price changes. It helps marketers set prices and forecast sales.
Can you give an example of a product with elastic demand?
Sure! Luxury items like designer handbags often have elastic demand; a price increase can significantly reduce sales.
What about inelastic products?
Inelastic products, like essential medications, see little change in demand despite price fluctuations.
How can businesses use this information in their marketing?
Businesses can tailor their pricing strategies, promotions, and product positioning based on elasticity insights.
Are there any risks in misjudging price elasticity?
Yes, misjudging elasticity can lead to lost revenue or excess inventory if prices are set incorrectly.
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