Consumers’ Price Sensitivity

The concept of consumers’ price sensitivity is a complex one, and of course needs to be determined in a context-specific basis.

Often it is assumed that (on average) consumers are (very) price-sensitive, and stemming from this belief, undue focus is put on offering low prices.  However, this assumption may – in many cases – be either mistaken or exaggerated.

Along these lines, posted the results of a recent Experian Marketing Services survey concerning shoppers’ price sensitivity relative to that of other factors.  The January 7 post is titled “Price Said to Matter Less Than Context Even to the Most Deal-Hungry Shoppers.”  An excerpt:

new report [download page] from Experian Marketing Services segments shoppers into 6 deal-seeking segments, ranging from “deal-seeker influentials” to “deal rejectors.” The researchers argue that marketers must understand these different groups of consumers in order to better target and engage them – and while that’s no doubt the case, there’s a shared trait among all of these segments that stands out: price carries less weight as a shopping factor than the store environment, the brands it carries, and the convenience it affords.

As the authors conclude: “many consumers are willing to pay more, provided their other needs are met.”

The post also contains a table and discussion of how the results vary among “deal-seeking” segments.

Due to the overall economic environment, as well as intensifying pricing competition and price discounting in many segments, accurately determining consumers’ price sensitivity – and if and how prices can be maintained and/or increased – will likely continue to grow in importance for many companies.

_____ is published by StratX, LLC (  StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.