Show Less
Restricted access

Price Elasticity

Research on Magnitude and Determinants

Series:

Evelyn Friedel

Price is a fundamental profit driver. It is by far the most sensitive profit lever that managers can influence. Very small price changes translate into enormous changes in profit. Price elasticity indicates how sensitively consumers react to price changes. Not only the knowledge about the magnitude of price elasticity, but also the knowledge about the determinants influencing the price reaction is essential. It is crucial for the development of a successful marketing strategy to understand how price elasticities vary with market and product characteristics. Reflecting the academic and managerial need, the objective of the research is to gain a comprehensive understanding in two main areas, the magnitude of price elasticity and the determinants of price elasticity.
Show Summary Details
Restricted access

Foreword

Extract



Price management has a high importance within the marketing field. Price is by far the most sensitive profit lever that managers can influence. Very small price changes translate into enormous changes in profit. Not only the knowledge about the magnitude of the price elasticity but also the knowledge about the determinants influencing the price reaction is essential. It is fundamental for the development of a successful marketing strategy to understand how price elasticities vary with market and product characteristics.

The work of Dr. Friedel makes a significant contribution to pricing research in two main areas: the magnitude of price elasticity and the determinants of price elasticity. To highlight is her unique dataset that stems from two data sources, academic publications and consulting projects. Her work comprises 863 price elasticities derived from 46 academic articles and 440 price elasticity cases from 62 consulting projects.

For the academic data, Dr. Friedel’s work goes beyond previous meta-analytic research by analyzing price elasticities more in detail. Price elasticities are not only compared on a product level but also compared across studies on a brand and brand size level. Therefore, her research provides new meta-analytic insights on the magnitude of price elasticities. In the consulting project data, the focus is on price elasticities derived from survey data. This data extends the knowledge on price elasticities as previous price elasticity analyses stem primarily from scanner data. The use of real business data ensures the high degree of managerial relevance in...

You are not authenticated to view the full text of this chapter or article.

This site requires a subscription or purchase to access the full text of books or journals.

Do you have any questions? Contact us.

Or login to access all content.