Description
A tool that determines a range of acceptable prices and an optimal price point based on an analysis of price/value ratings obtained from consumers. Key data analyzed is from responses to questions about what prices for a product or service are considered too high or too low. Plotting this information onto Price Maps shows high/low price thresholds as well as the price point considered optimal. The PSA model is often used during the new product development phase to aid in setting price. Whether a client is contemplating an aggressive entry price strategy or a premium skimming approach to price, the van Westendorp PSA can help determine which strategy is best. Established brands will use the PSA model to guide pricing for re-positioning or other pricing decisions, often as input to a test market.
