Price sensitivity is a vital component in accurately forecasting future demand and setting prices, reflecting consumers' perspective on pricing relative to other purchasing criteria. Price sensitivity can depend on a variety of factors. These may include: Price Sensitivity Price sensitivity measures how demand changes in response to changes in price. A higher price sensitivity means greater impact from small price increases on total purchases; for instance, when consumers drink a specific brand of juice that experiences an unexpected 2% cost increase they may cease purchasing or search out cheaper alternatives. Price-sensitive products often include those with multiple substitutes, luxury goods or non-essential products. On the other hand, some unique and valuable items may co...
Read More
