What does it mean to be price sensitive?

Price sensitivity can basically be defined as being the extent to which demand changes when the price of a product or service changes. For example, customers seeking top-quality goods are typically less price-sensitive than bargain hunters; so, they’re willing to pay more for a high-quality product.

What is price sensitivity and why is it important?

Price sensitivity deals with the consumer’s sensitivity to price changes and is important for strategic decisions. Price has a significant influence on the behavior of consumers and consequently on firm revenues and profits.

Which customers are price sensitive?

Price sensitive customers are those who view price as a serious factor in a purchase. Some customers view extremely low prices as too good to be true and may assign a poor value to a product without having tried it. These types of prestige price customers often refuse to purchase a product of lower cost.

Are convenience products price sensitive?

Convenience goods are often purchased through habit or impulse because they are easily obtained by consumers and relatively inexpensive. Consumers are sensitive to convenience good price changes. Marketers need to consider price increases with respect to demand for items that a buyer may bypass due to a price hike.

What is the example of sensitivity?

Sensitivity is the quality of being tender, easily irritated or sympathetic. An example of sensitivity is lights hurting someone’s eyes. An example of sensitivity is a person who gets upset very easily. An example of sensitivity is how a friend treats another who’s going through a tough time.

What is it called when a product is sensitive to a change in price?

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. For instance, very often the consumers are not agreeable to pay even a few cents per gallon for gasoline, especially if a lower priced station is located nearby.

What affects price sensitivity?

What affects price sensitivity? Price sensitivity varies based on the industry, geographic competition, competitor marketing, personal emotions and needs of customers, and even economy.

What is the importance of price sensitivity?

Your product’s price sensitivity will also help you determine the amount of value you’re creating in your product by revealing your customer’s willingness to pay. It translates value from an ambiguous buzzword into a quantifiable metric that you can optimize for and improve when you implement price changes.

How do you handle price sensitive customers?

How to Create a Strategy for Price- Sensitive Customers

1. Focus on benefits. It’s not enough to just rattle off a list of a product’s features.
2. Focus on education. Sixty-six percent of shoppers use search engines to find the products they want.
3. Be transparent.
4. Create a sense of urgency.
5. Offer bonuses to sweeten the deal.

What are the four factors that influence price sensitivity of customers?

Factors affecting price sensitivity

• Product type.
• Reference price.
• Switching costs.
• Product uniqueness.
• Ease of comparison.
• Brand’s fairness.

What products are price sensitive?

The more options a buyer has, the more sensitive he is to a price change in most cases. Higher-priced products, such as cars, heating and cooling systems and washers and dryers, usually lead to greater price sensitivity since they take up a large percentage of the buyer’s budget.

How do you describe sensitivity?

readily or excessively affected by external agencies or influences. having acute mental or emotional sensibility; aware of and responsive to the feelings of others. easily pained, annoyed, etc.

Which is the best definition of price sensitive information?

Definition of price-sensitive information price-sensitive information means any information which relates, directly or indirectly, to a company and which if published is likely to materially affect the price of securities of the company.

What does it mean to have unpublished price sensitive information?

Unpublished price sensitive information means any information which relates to the internal matter of a company and is not disclosed by the company in the regular course of business. If such information is leaked, it affects the price of securities of the company in the stock market.

Is it illegal to use price sensitive information?

Any person who uses price sensitive information to make a profit either for themselves or a third party in the shares of a company is in breach of insider trading laws.

How is insider trading related to price sensitive information?

Insider trading relates to such unpublished information which can materially affect the price of securities, and is only permissible by employees as long as it does not rely on substantive information unknown to general public. This paper analyses how SEBI monitors the same, § 55A of Companies Act, 1956, and landmark judgments on the same.