A-Z Popular Blog Top Search »
Pricing
 Advertisements
Marketing Guides
Pricing Strategy
top   »  marketing   »  pricing   »  price differentiation   »  price sensitivity

What is Price Sensitivity?

 , January 10, 2016 updated on January 13, 2023
Price sensitivity is the degree to which demand drops as you increase the price of a product or service. At the individual customer level, this can be viewed as a drop in conversion rate as you increase the price.
Price sensitivity varies greatly from one customer to the next. For example, in many cases businesses and governments are willing to pay far more than individuals.
It is common for pricing strategies to charge different prices based on a variety of factors designed to separate customers based on price sensitivity. For example, airlines may charge a lower price for tickets that involve a Saturday night stay. This is designed to identify business travelers who are typically less price sensitive.
Overview: Price Sensitivity
TypePricing
DefinitionThe degree to which demand drops as you increase the price of a product or service.
ValueModeling price sensitivities is the basis for many pricing strategies.
Related ConceptsPricing Strategy
Price Discrimination

Pricing

This is the complete list of articles we have written about pricing.
Algorithmic Pricing
Bargaining Power
Benchmark Price
Commoditization
Cost-plus Pricing
Customary Pricing
Decoy Effect
Everyday Low Price
Marginal Utility
Willingness To Pay
Dynamic Pricing
High-Low Pricing
Market Value
Flat Pricing
Loss Leader
Predatory Pricing
Price Discrimination
Snob Effect
Market Price
Price Competition
Price Leadership
Premium Pricing
Price Economics
Price War
Revenue Management
Veblen Goods
Price Floor
Price Promotion
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Models
Pricing Power
Pricing Strategy
Sticky Prices
Value For Money
More ...
If you enjoyed this page, please consider bookmarking Simplicable.
 
Cite »

Pricing Strategy

An overview of common pricing strategies.

Price Discrimination

A list of price discrimination strategies.

Price War

An overview of price wars.

Price Economics

A list of price economics principles and theories.

Premium Pricing

A definition of premium pricing with examples.

Penetration Pricing

A definition of penetration pricing with examples.

Variable Pricing

The definition of variable pricing with examples.

Channel Pricing

A definition of channel pricing with examples.

Supply And Demand

An overview of supply and demand with examples.

Value Pricing

The definition of value pricing with examples.

Top

Simplicable is a modern encyclopedia that has been updated daily since 2010.

Business Theory

A list of interesting business theories.

Knowledge Work

A definition of knowledge work with examples.

Office Politics

A list of social processes, absurdities and strategies related to office politics.

Product Development

A guide to product development.

Types Of Knowledge

The differences between types of knowledge.

Trough Of Sorrow

An overview of the trough of sorrow.

Business Models

A list of common business models.

Marketing

A list of things that marketers do.

Competitive Advantage

A list of common competitive advantages.

Trending

The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map
Engineering
Governance
Government
Humans
Industries
Influencing
Information
Information Technology
Infrastructure
Life
Management
Manufacturing
Marketing
Materials
Metrics
Motivation
Nature
Organizational Culture
Philosophy
Primary Stakeholder
Problem Solving
Productivity
Quality
Risk
More ...
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.

View credits & copyrights or citation information for this page.

Home About     Privacy Policy     Cookies Terms of Use     Contact Us Search


Cookies help us deliver our services. You have choices regarding these cookies. Please visit our privacy policy, cookie policy and consent tool to learn more.


Copyright 2002-2023 Simplicable. All rights reserved. This material may not be published, broadcast, rewritten, redistributed or translated. Report violations here.