Price Sensitivity Meter (PSM)

Van Westendorp Model

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

  1. Govoni, N.A. Dictionary of Marketing Communications, Sage Publications. (2004)
  2. American Marketing Association, AMA Dictionary.
  3.  Michael Lieberman. “Pricing research: A New Take on the Van Westendorp Model.” Quirk’s Marketing Research Review, June 2015.

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