Factors Affecting Price Sensitivity

Unique – Value Effect: Buyers are less sensitive when the product is more unique.

Substitute- Awareness Effect: Buyers are less price sensitive when they are less aware of the substitutes.

Difficult-Comparison Effect: Buyers are less price sensitive when they cannot easily compare the quality of substitutes

Total Expenditure Effect: Buyers are less price sensitive of the product is not very expensive with respect to their income.

End-Benefit Effect: Buyers are less price sensitive the less the expenditure is to the total cost of the product.

Shared Cost Effect: Buyers are less price sensitive part of the cost is borne by another party.

Price Quality Effect: Buyers are less price sensitive when the product is assumed to have more quality, prestige or exclusiveness.

Inventory Effect: Buyers are less price sensitive when they cannot store the product.

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