Price sensitivity Model

Price sensitivity can be defined as the degree to which consumers’ behaviors are affected by the price of the product or service. Price sensitivity is also known as price elasticity of demand and this means the extent to which sale of a particular product or service is affected. Another way of explaining price sensitivity is, “the consumer demand for a product is changed by the cost of the product”. It helps the manufacturers study consumer behavior and assists them in making good decisions about the products. The level of price sensitivity varies depending on various products and consumers. Price sensitivity, in economics, is generally quantified through the price elasticity of demand. The Owl Strategy has deployed this method to help clients optimize prices in Financial Services, Healthcare and Beauty services, and products, Durable Goods, Packaged Food, and B2B services. The technique, Dynamic Price Sensitivity Modeling (DPSM) identifies the Optimal Price Point (OPP) and the Range of Acceptable Pricing (RAP) for new or improved products or services.

Product research-Price sensitivity