Definition
Price sensitivity refers to the degree to which demand for a given product is affected by a change in its price. [1]
Price sensitivity meter (PSM) refers to a research method for establishing the range of prices that customers are willing to pay for a product. [2]
The technique was introduced as the Van Westendorp Model by Dutch economist Peter van Westendorp in the 1970s. [3]
References
- Govoni, N.A. Dictionary of Marketing Communications, Sage Publications. (2004)
- American Marketing Association, AMA Dictionary.
- Michael Lieberman. “Pricing research: A New Take on the Van Westendorp Model.” Quirk’s Marketing Research Review, June 2015.