Van Westendorp Price Model
Van Westendorp Price Model, also known as the Price Sensitivity Meter, is a market research technique used to determine the optimal price for a product or service. This model is based on four questions asked to potential customers to gauge their price sensitivity:
- At what price would you consider the product/service to be a bargain?
- At what price would you consider the product/service to be expensive, but still worth considering?
- At what price would you consider the product/service to be too expensive to consider?
- At what price would you consider the product/service to be too cheap to be of good quality?
By analyzing the responses to these questions, businesses can determine the range of acceptable prices for their offerings. The Van Westendorp Price Model helps in understanding customer perceptions of value and pricing thresholds, allowing companies to set prices that maximize revenue and profitability.
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