Professional advice for entrepreneurs and business managers in the context of Europe's recovery from the financial crises. Marketing notes, stories and videos.

Price Elasticity

The concept of elasticity is used to measure the degree of market response to price changes (price sensitivity).

  • Elasticity is a measure of demand responsiveness.
  • Can be computed for a range of prices and quantities.

Definition of elasticity:

Percentage change in sales volume divided by the percentage change in sales. [Read more…]

Pricing Strategy

Pricing is extremely impactful. For many products and for many consumers price is a key feature. Price changes have immediate impact and prices are in many cases very visible. Competitors can react quickly to price changes. Price is the only element in marketing mix that has a direct impact on revenues.

R = P x Q

How to increase price without being noticed?

  • Increasing the size of packaging while decreasing the size of its contents.

[Read more…]