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Van Westendorp’s Price Sensitivity Meter (PSM)
5 min readSep 29, 2024
In this article related to the price Strategies in the series of International Marketing I will cover the Van Westendorp’s Price Sensitivity Meter (PSM) with a step by step practical example
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What is the Price Sensitivity Meter (PSM) ?
The Price Sensitivity Meter (PSM) is a technique proposed by the economist Peter van Westendorp in the 1970s that helps determine the psychologically acceptable range of prices for a single product or service. It is based on responses to four specific pricing questions posed to consumers. These questions are:
- Too Expensive : At what price would you consider the product to be too expensive, meaning you would not buy it?
- Too Cheap : At what price would you consider the product too cheap, meaning you would question its quality?
- Expensive : At what price would you consider the product expensive but still worth considering?
- Cheap : At what price would you consider the product a great deal (a bargain)?
By collecting responses to these questions, we can determine:
