Smarter Pricing: How to capture more value in your market

Different customers, different sensitivity

Price sensitivity will vary between customers. Different segments exhibit differing awareness and consciousness of price. The author met Jonas Gunnarsson, Director of Market Research for the major Nordic supermarket group ICA, who described how he investigated consumer price perceptions of price levels in grocery stores. Interestingly, he used a 70-item ‘shopping basket’ to calibrate the actual ranking among ten grocery stores serving a particular Swedish community. He then surveyed consumers in this community for their perceptions. To quote his paper, ‘The respondents who provided answers on average come very close to the actual store price index.’ This is impressive. However, about one third of respondents ...