Price Sensitivity Measurement: A Yield Management Approach

Çolak, Okan; Koşan, Levent

doi:10.26650/ibr.2021.51.0073

Cited by 4 publications

(4 citation statements)

References 27 publications

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“…Overall, two core findings can be drawn from the WTP analysis for meat labeled with the multi-level husbandry label:1. The results show that consumers are highly price sensitive and have a strong preference for low prices when buying meat: IDPs are mostly considerably above OPPs, mainly for level 4, confirming high stress regarding prices (Çolak and Koşan, 2021). Furthermore, IDPs are the prices at which the maximum share of possible buyers can be reached (Arru et al.…”

Section: Discussionmentioning

confidence: 89%

“…1. The results show that consumers are highly price sensitive and have a strong preference for low prices when buying meat: IDPs are mostly considerably above OPPs, mainly for level 4, confirming high stress regarding prices (Çolak and Kos ¸an, 2021). Furthermore, IDPs are the prices at which the maximum share of possible buyers can be reached (Arru et al, 2022), and this price can be interpreted as the perceived normal market price (Harmon et al, 2007).…”

Section: Wtp and Price Sensitivity For Label Levelsmentioning

confidence: 90%

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Willingness to pay for a multi-level animal husbandry label: an analysis of German meat consumers

Kühl,

Schütz,

Busch

2024

BFJ

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PurposeThe use of multi-level labels can enhance product visibility by enabling labeling of various items. Moreover, it can better accommodate the diversity on both the producer and consumer sides. However, studies on the willingness to pay (WTP) for premium levels of those animal welfare labels are scarce.Design/methodology/approachWe investigate consumers’ WTP for a four-level animal husbandry label introduced to the market by German retailers in 2019 by conducting an online survey with 1,223 German meat consumers using Van Westendorp’s price sensitivity meter (PSM).FindingsThere is a significant increase in WTP for level 3 of the husbandry label, but only a slight increase for level 4. One explanation is that consumers may have the mistaken belief that level 3 already includes outdoor access for animals. As a result of this expectation, consumers may not perceive much added value in level 4, which is reflected in their reluctance to pay a higher price. This is reinforced by the finding that once informed of the criteria, 18% of the participants reduced their WTP for level 3, whereas only 6% considered a discount for level 4. Furthermore, 40% were prepared to pay more for level 4 after being informed of the respective criteria than they had previously stated.Originality/valueTo the best of our knowledge, this study is the first to analyze and emphasize the importance of clear label communication, particularly for multi-level animal husbandry labels.

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Section: Discussionmentioning

confidence: 89%

Section: Wtp and Price Sensitivity For Label Levelsmentioning

confidence: 90%

Willingness to pay for a multi-level animal husbandry label: an analysis of German meat consumers

Kühl,

Schütz,

Busch

2024

BFJ

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“…Both consumer categories displayed the same positive stress price range (2.50 €) and high values of stress factors (36% and 32%), indicating that all consumers prefer and expect low prices and that the price sensitivity of the customers is high [134]. Consumers with less SK showed a slightly higher stress level, meaning a slight superior price sensitivity, i.e., they would be willing to pay around 36% less than the "normal" market price.…”

Section: Relatively Cheap Price Range and Price Thresholdsmentioning

confidence: 86%

Price Sensitivity of Fish Fed with Insect Meal: An Analysis on Italian Consumers

et al. 2022

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The importance of aquaculture in reducing pressure on wild stocks in the seas and meeting the demand for fish worldwide has increased greatly in recent years. However, sustainability of the sector can be jeopardized by the incessant use of fish meal as the main source of feed. For this reason, replacing, even partially, fish meal with other feeds such as insect meal is essential to make this sector more sustainable. However, this transition requires consumer acceptance of this innovation, which comes through price, one of the most powerful marketing tools affecting the evaluation of product alternatives (e.g., fish fed with traditional feed or insects) and the final purchase decision. The objective of this study is to explore the acceptable price and the limits of price thresholds of fish fed with insect meal using a direct measure of assessing consumers’ willingness to pay. In particular, the study uses the Price Sensitivity Meter (PSM) of Van Westendorp to evaluate the reaction of Italian consumers to the price of European sea bass (Dicentrarchus labrax) hypothetically fed with insect meal. The results showed a wide acceptable price range, an indifferent price point very close to the price of traditionally fed fish, and a high price stress factor. Consumers have shown considerable price sensitivity, which does not allow the additional costs arising from the use of this sustainable alternative feed to be passed on to them. Consumers with great subject knowledge showed major willingness to pay. The contribution of our study lies in providing detailed insights into the possible prices that consumers are willing to pay for sea bass fed with insect meal and thus on the product’s perceived quality, offering several implications for academics, practitioners, and policymakers.

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“…In terms of consumer perception, it is a purchase activity that matches the consumer's expectations in terms of value and that the consumer evaluates as relevant and successful. Empirical analysis has shown that the indifference price (IDP) (Çolak & Koşan, 2021), which presents either the median price paid by consumers, or the price of the product of a market leader, can vary for various sub-markets as price-conscious customers (people who buy cheap products and people who buy expensive products and brands). A general price anchoring point in a market exists and many people who buy more expensive brands or product types are fully conscious of doing so (van Westendorp, 1976).…”

Section: Methodsmentioning

confidence: 99%

Price sensitivity testing as a basic tool for strategic pricing decisions

Kintler¹,

Remeňová²,

Kmety³

2023

Strategic Management

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Background: Data-driven decisions in each functional area of management, through all of the strategic levels, in the present time of dynamic changes in geopolitical and market conditions are necessary to achieve corporate (economic and social) goals, in line with securing future business success and sustainability. Because of this business need, we will focus in our research paper on price management, which can be seen as a supportive tool for strategic decisions, where competent decisions should be based on data-driven pricing decisions. Purpose: The aim of the research study is to identify what price consumers are prepared to pay for a new food product in a relatively saturated foreign market. The research study was conducted in the milk chocolate bar market segment. Study design: We applied the van Westendorp price sensitivity test to identify the range of acceptable prices for a product that is willing to enter a new foreign market. For this purpose, we used a milk chocolate bar product currently unknown in the Slovak market. Findings: In addition to the van Westendorp price sensitivity measurement, we used a non-parametric Mann Whitney U test to confirm the hypothesis that chocolate tasting will increase the likelihood of customers to pay a higher price for the tested product. The hypothesis mentioned above was statistically confirmed. Limitations: It is necessary to monitor customer reactions to a given price level and be prepared to optimize it. We did not address this part of the analysis in identifying a price that would be acceptable to consumers in terms of value perception, due to the scope of the study.

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Price Sensitivity Measurement: A Yield Management Approach

Cited by 4 publications

References 27 publications

Willingness to pay for a multi-level animal husbandry label: an analysis of German meat consumers

Willingness to pay for a multi-level animal husbandry label: an analysis of German meat consumers

Price Sensitivity of Fish Fed with Insect Meal: An Analysis on Italian Consumers

Price sensitivity testing as a basic tool for strategic pricing decisions

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