Van Westendorp method: definition
The Van Westendorp method, also known as Van Westendorp's Price Sensitivity Meter (PSM for short), is a very popular and relatively simple method for measuring the price sensitivity of a target group. The method is based on the Dutch economist and market researcher Peter van Westendorp and was first mentioned in 1976.
The four questions of the Van Westendorp method for pricing & price sensitivity
The Van Westendorp method is about finding out when the price for a product or service is accepted or rejected by the customer, i.e. when it is perceived as too expensive, expensive, cheap and too cheap. These four dimensions are presented in the form of four questions:
- At what price would you find the product too expensive, i.e. not buy it at all?
- At what price would you perceive the product to be cheap, i.e. if you doubt the quality of the product due to the low price
- At what price would you consider the product to be expensive, i.e. consider buying it, but only after careful consideration
- At what price would you consider the product to be cheap, in terms of a very good, acceptable offer!
The subjects then select a price for each question from a given price table. The values are then cumulated and shown in the form of the following graphic, from which you can read out the “optimal price”, which results from the intersection of the curves for “too expensive” and “too cheap”. Tip: in the specialist literature it is recommended to include a number of test persons from 300 upwards in the survey in order to achieve a reliable result.
The Van Westendorp method can also be easily and conveniently implemented with our web-based survey, analysis and market research software QuestionPro implement and display graphically. Using the questionnaire designer and with the support of a wizard, i.e. a question assistant, you can create questions about the Van Westendorp method with just a few clicks of the mouse, in any language of course!
Van Westendorp method:
Live example with real-time evaluation
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