Price Sensitivity Meter (PSM) or the Van Westendorp Method
PSM is a research method that allows you to determine the most acceptable consumer price range based on the perceived value of the product.
It is used in the development of a new product and while studying the perception of price for an existing product. The PSM pricing methodology is as follows:
The respondent is presented with a description of the concept (be it a product or service) and is then asked 4 questions about it:
In addition to the four questions from the classical methodology, two more questions may be asked in relation to the probability of purchase.
What tasks can be solved with this service?
The implementation of this method is considered optimal for new products or services prior to their launch on the market or in situations where there is reason to suspect that the price set by the manufacturer would not be accepted by customers and needs reviewing.
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