Price sensitivity, does it increase during a recession?
In this paper, the authors describe a method which has been tested over many years. It offers a means for testing the sales effect of price decisions before the new price has been released on the market. Thus marketing companies can evaluate pricing decisions without revealing their intent to the competition. To date most 'laboratory' test methods rely on respondents who are solely shown the brand as a concept, this paper stresses the importance of collecting product-in-use data related to different price levels. Often it is the in-use evaluation of the brand which yields the most reliable estimate of price elasticity.
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