Research Topics:

Pricing Research

Content Type:

Glossary

Elasticity Definition

Measures the extent volume shifts in response to a shift in the variable under consideration.

In marketing research, elasticity measures how consumer demand and behavior respond to changes in variables like price, income and competition from new products. It is the extent to which changes in purchasing factors or demographics impact the quantity demanded or bought by consumers. Insights from elasticity data helps marketers avoid pitfalls like underpricing or overpricing products. What’s more, they help determine effective promotional strategies and expected reactions to changes. The bottom line is businesses with knowledge of elasticity can create more accurate business projections and make data-driven decisions.

Who relies on elasticity?

Product managers, pricing strategists, market researchers and economists are among those professionals who use elasticity findings to enhance pricing strategies and forecast sales, as well as assess the impact of marketing campaigns and make decisions about product development and market positioning.

Why should I care about elasticity?

The concept of elasticity provides marketing professionals and businesses with insights into consumer behavior and market dynamics. They can determine how variables like price and income impact customer preferences. Then, they can adjust their strategies accordingly. The goal is to maximize revenue, profit and market share.