Price Elasticity

Determining price strategies and tactics is a priority for marketers. Price-related research is always helpful in deciding the optimal price of a product. Price elasticity research provides exactly this type of information. In other words, price elasticity measures how the market will react to small alterations in price, which is measured in percentages.

If you plan to increase the price of a product, this index will show what you should expect – whether the demand will remain the same or consumption will critically fall. If the market demand stays unaltered by a price change, then the demand is not elastic. If even the smallest modification causes great changes, then the demand is elastic and price determination should be conducted with caution.

The elasticity index can be determined by a real sales index analysis, test market analysis, or by investigating consumers future attitudes. ACT offers research on price elasticity based on customer behavior prognosis to hypothetical price scenarios. Such an approach also allows for a cross-elasticity analysis of your prices, as well as of competitors’ prices.


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