Determine the price sensitivity, Managerial Accounting

Assignment Help:

Price sensitivity

Nagle has identified nine factors that contribute to price sensitivity and has also presents various methods or techniques to measure it. The factors that contribute to prices sensitivity are:

1) Unique value effect: the more unique the product the lower is its price sensitivity.

2) Substitute awareness effect: if buyers are aware of substitutes and these perform the same function then the buyer's price sensitivity will be high.

3) Difficult comparison effect: price sensitivity will be low if the buyer has difficulty in coma ring two alternatives.

4) Total expenditure effect: if the expenditure on the product represents a low proportion of the consumer income then total the price sensitivity will be less visible for such a product.

5) End benefit effect: buyers are less price sensitive where the expenditure on the product is low compares to the total cost of the end product.

6) Seared cost effect: if the cost of the product is shared by another party, the buyer will be less prone to price sensitivity.

7) Sunken investment effect: price sensitivity is low in products, which are used along with assets previously bought.

8) Price quality effect: the higher the perceived quality of the product the lower the price sensitivity.

9) Inventory effect: if the product cannot be store the buyer will be fewer price sensitive.

 

 


Related Discussions:- Determine the price sensitivity

Evaluate consumer surplus and the average price, Suppose the consumer is at...

Suppose the consumer is at coffee shop 2. Coffee shop 2 provides unlimited cups of coffee for the price of $9.00 per day. - How many cups would she drink a day and how much woul

Sensitivity analysis of eoq model, SENSITIVITY ANALYSIS OF EOQ MODEL Se...

SENSITIVITY ANALYSIS OF EOQ MODEL Sensitivity Analysis is regarded with the manner in which those results of solutions change in response to change in model parameters.

Profi t Planning, Master budgeting Jaya Sdn. Bhd. is a wholesaler. The mana...

Master budgeting Jaya Sdn. Bhd. is a wholesaler. The management of Jaya Sdn. Bhd. has been extremely worried about the company''s cash position over the last few years. In July 201

Learning and spillovers , Learning and Spillovers The cost of a value ...

Learning and Spillovers The cost of a value activity can decline over time due to learning that increases its efficiency. The methods by which learning can lower cost over tim

Balanced score card, Balanced Score Card This is a popular approach in ...

Balanced Score Card This is a popular approach in current management thinking which consists of a variety of indicators both financial and non-financial. The balanced scorecard

Chapter 3, Cretin Enterprises uses a predetermined overhead rate of $21.40 ...

Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact

What are the objectives of the cost accounting, Objectives of the cost acco...

Objectives of the cost accounting The Objectives of the cost accounting are ascertain of costs, fixation of selling prices, proper recording and presentation of cost data to th

Definition of activities based costing, Definition of Activities based cost...

Definition of Activities based costing Activity based costing is a system that focuses on activities as the fundamental cost objects and uses the costs of these activities as b

What are the changing role of management accounting, What are the Changing ...

What are the Changing role of management accounting 1. Focus on customer scarification: customer satisfactions are continuously gaining high priority in management thinking i

Determine the fixed assets turnover ratio, Fixed assets turnover ratio ...

Fixed assets turnover ratio Meaning: this ratio establishes a relationship among net sales and fixed assets. Objective: the objective of computing this ratio is to verif

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd