Peter Van Westendorp

Dutch economist who created the Price Sensitivity meter in 1976 to measure the value-based pricing.

Deeper Insights

Peter Van Westendorp created four simple questions to gather data about a particular target segment:

- At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)

- At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)

- At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)

- At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value)

These four questions can be utilized to find the optimal price for a product.

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Related Keywords: Value Metric, Perceived Value, Price Sensitivity Meter, Value-Based Pricing