Van Westendorp Analysis (aka “Price Sensitivity Meter”)
November 26th, 2008
Background
- First proposed in 1976 (van Westendorp 1976)
- The Price Sensitivity Meter (PSM) has steadily gained in popularity as companies increasingly try to estimate optimal pricing
- Particularly popular for use in consumer goods and small ticket B2B products
- Concept is driven by two psychological principles: "Theory of Reasonable Prices"; "Price Signaling Quality". (see bottom of page for more details)
