Evaluating Pricing Strategies with the Price Sensitivity Meter PPT

This PPT slide, part of the 21-slide Price Sensitivity Meter (PSM) PowerPoint presentation, presents an overview of the Price Sensitivity Meter (PSM), outlining its advantages and disadvantages in evaluating the pricing of new products. The PSM is characterized as a straightforward method, requiring consumers to respond to just 4 questions in a survey. This simplicity is a significant benefit, as it allows for easy administration and quick data collection. The analysis of the survey results is described as uncomplicated, facilitating a clear understanding of consumer behavior regarding pricing. Additionally, the findings from the market research are communicated effectively through simple diagrams, enhancing clarity for stakeholders.

However, the slide also highlights notable limitations of the PSM approach. One major drawback is that the survey does not take into account the specific characteristics of the product being evaluated. This lack of detail can lead to incomplete insights, particularly for complex products where features significantly influence consumer willingness to pay. The research primarily focuses on the “willingness to pay” aspect, which may not provide a comprehensive view of market dynamics. Furthermore, respondents may lack awareness of the product details, which could skew results and reduce accuracy.

The PSM is deemed more suitable for new products,, but it presents challenges when comparing prices with competing offerings. This could hinder strategic pricing decisions, as understanding the broader market context is crucial for effective positioning. Overall, while the PSM offers a user-friendly framework for initial pricing assessments, its limitations warrant careful consideration before relying solely on its findings.

This slide is part of the Price Sensitivity Meter (PSM) PowerPoint presentation.

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