Key Intersections in Price Sensitivity Analysis PPT

This PPT slide, part of the 21-slide Price Sensitivity Meter (PSM) PowerPoint presentation, presents an overview of the Van Westendorp Price Sensitivity Meter (PSM), focusing on how to evaluate price intersections to determine optimal pricing strategies. It outlines 4 critical curves generated by the PSM, which illustrate consumer perceptions regarding acceptable price ranges.

The first key point discussed is the intersection of the lower bound curves, where the "Point of Marginal Cheapness" is identified. This juncture indicates the price at which consumers begin to view a product as either a bargain or too cheap, potentially affecting their perception of quality. The slide notes that this point is crucial for pricing decisions, particularly when considering consumer psychology.

Next, the slide addresses the upper bound curves, highlighting the "Point of Marginal Expensiveness." This point marks the threshold where the price is perceived as too high, with a specified range of $10 to $25. Understanding this range is vital for maintaining consumer interest without crossing into a territory that could deter potential buyers.

The slide also mentions the "Optimal Price Point," which lies between the Too Expensive and Too Cheap intersections. This point is significant as it represents the lowest price consumers are willing to accept without feeling the product is undervalued.

Finally, the slide emphasizes the need for additional pricing methods to complement the PSM, suggesting that a multifaceted approach may be necessary for complex product offerings. This insight is particularly relevant for executives looking to refine their pricing strategies based on consumer behavior and market dynamics.

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Pricing Strategy Consumer Behavior