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, MarketingCharts.com 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:
A 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.
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