A Straightforward Refresher on Price Sensitivity
Have you ever been called sensitive? I certainly have, many times. As a personality trait, sensitivity can be a good thing it can help us be more understanding and empathetic towards others.
But when it comes to things like your teeth, or the buying habits of your customers, you’ll want to address sensitivity head-on. If even the slightest change in price causes your customers to go running towards your competitors, chances are you’re experiencing high price sensitivity. Here, we’ll discuss what price sensitivity is, and what factors contribute to it.
What is price sensitivity?
The Plain English Guide to Sticky Prices
Some things never change.
The world never stops turning. Arnold Palmers are always the best drink to order on a restaurant patio in the summer, and Betty White remains a national treasure with every passing year. There are plenty of other examples I could cite those are probably the main ones though.
Consistency is, well, consistent in a lot of fields, and pricing is no exception. Certain goods and services prices can be extremely resistant to change they re prices that
stick and are, naturally, referred to as
sticky prices.
Here, we ll explore price stickiness a bit further, go over some examples of sticky prices in practice, and contrast the concept with its natural opposite: flexible pricing.
What Is Captive Product Pricing?
Imagine owning an Xbox without games, or a film camera with no film. Unless you’re a collector, it doesn’t really make sense. You may own both of the items, but if you’ve paid a lot of money for them you probably want to use them to their full potential. The companies you buy from know that you need both the film and the games to make these products work, so they sell the core product, the Xbox or film camera, separate from the accessory product, games or camera film, in order to inspire more sales.