This refers to the price your customer is willing to pay for a product or service. Therefore, price sensitivity is measured by demand. If the demand for a product is inelastic, it means that the consumer is not price sensitive, that’s when you have the chance to raise the prices of your products or services without diminishing the demand. This inelasticity is very common in essential products for living, like food or hygienic products, which people would keep buying even if the prices rise at a certain moment. On the other hand, we can say that a consumer is elastic or more price sensitive, when by changing a little the price, the demand changes a lot. These situations happen usually when the product is not essential, it’s the opposite, a commodity people can dispense , such as electronics or travelling. As we can see, price sensitivity is pretty much determined by the product or service you are dealing with, but that doesn’t mean that you can´t influence the price sensitivity of your customers to a certain extent. In the next paragraphs we will see the factors that can influence your consumers and what you can do to work better on it.
Factors that you should consider when having an ecommerce:
The most important thing to keep this under control is to know the market and the consumer you are targeting. For example, by applying a dynamic pricing strategy, you will not only be able to monitor your competitors’ prices, but also check which products are more sensitive than others and set the best prices possible for your product and consumer.
