How to predict the sensitivity of demand to price

Date of publication: September 1, 1988

Author: Joel N. Axelrod


The purpose of this paper is to describe how a user can predict sensitivity of demand to price for consumer products. The trademarked name for the technique is $9.99 Price Testing. However, the technique itself is simply an application of classic experimental design. At the end of this paper, you should have enough understanding of the technique to design and conduct such a study. There is both a science and an art to doing $9.99 Price Testing. The goal here is to communicate both the science and some of the art. I say "some of the art," because the real world is so infinitely complex that there is no way to fully communicate the art involved in all the possible applications.

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