However, many marketers have not developed a customer-oriented pricing strategy. With current emphasis on value marketing and value pricing, marketers can't afford to ignore their customers' perceptions of price. C. Price sensitivity is a key element in determining the price elasticity of demand. You can use test marketing to gauge customer reaction to various prices in sample markets. This kind of testing can be expensive, and it lets competitors see your pricing options.
Some marketers offer their products by mail to test customer reaction to various prices.
Another alternative is to use simulated test marketing to test prices in a laboratory setting. You can also use multiple trade-off analysis to help understand how customers respond to different value packages at various prices. More marketers are moving toward incorporating the results of pricing research into computerized pricing models. Regardless of their pricing objectives, marketers usually aim to set prices to at least cover costs. Before setting prices, marketers analyze costs and relate these to sales revenues and profits.