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Price-sensitivity measurement examines consumers' price perceptions by determining levels of customer resistance as they relate to perceived quality and the market range of acceptable prices for a specific product or service. The analysis begins with four questions regarding each specific product or service. The first two questions are used to determine the indifference price, or the price at which an equal number of respondents feel the product or service is cheap as feel it is expensive (see Graph A).
(1 ) At what price on the scale do you consider the product or service to be cheap?
(2) At what price on the scale do you consider the product or service to be expensive?
The second two questions are used to determine the optimal pricing point, the price at which consumer resistance to purchase...