How to Create a Price Sensitivity Meter (Van Westendorp Plot)

Introduction

The price sensitivity meter is a set of survey questions that are used to work out how to set prices for products. It does so based on a concept of what price most people regard as being reasonable (as opposed to what price will maximize profits, which is the framework more commonly used when setting prices).

Requirements

A dataset that has numeric responses to these questions in tabular format:

1. At what price would you consider this PRODUCT/BRAND to be so inexpensive that you would have doubts about its quality? [“Very cheap”]?
2. What price would you still feel this PRODUCT/BRAND was inexpensive yet have no doubts as to its quality? [“Cheap”]?
3. At what price would you begin to feel this PRODUCT/BRAND is expensive but still worth buying because of its quality? [“Expensive”]?
4. And, at what price would you feel that the PRODUCT/BRAND is so expensive that regardless of its quality it is not worth buying? [“Very expensive”]?

Method

1. Go to Visualization > Exotic > Price Sensitivity Meter

2. In the object inspector go to the Data Source tab.

3. For Price considered 'Too cheap' - select corresponding numeric variable

4. For Price considered 'Cheap' - select corresponding numeric variable

5. For Price considered 'Expensive' - select corresponding numeric variable

6. For Price considered 'Too Expensive' - select corresponding numeric variable

OPTIONAL METHOD:

1. Create a table of raw values as below (Note: Column names must match exactly)

2. Go to Visualization > Exotic > Price Sensitivity Meter

3. In the object inspector go to the Data Source tab.

4. In Output in 'Pages', select the table created above