algo-price-van-westendorp
Van Westendorp Price Sensitivity Meter
Overview
Van Westendorp PSM uses four price perception questions to identify an acceptable price range through intersection analysis. Produces: Point of Marginal Cheapness (PMC), Point of Marginal Expensiveness (PME), Indifference Price Point (IPP), and Optimal Price Point (OPP). Requires survey data from 100+ respondents.
When to Use
Trigger conditions:
- Setting initial price for a new product or service
- Identifying the acceptable price range from consumer perception
- Quick pricing research without complex experimental design
When NOT to use:
- When you need to measure attribute trade-offs (use conjoint analysis)
- When you need demand curve estimation (use price elasticity)
Algorithm
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