Price Sensitivity Analysis PDF

# Prendre en compte la sensibilité-prix ## DOC. 1 Le marché du snacking - The snacking market has become the leading form of out-of-home dining, on par with collective catering. - Out of 160 meals consumed outside the home each year, 65 are snacks, 65 are canteen meals, and 30 are from traditional...

# Prendre en compte la sensibilité-prix ## DOC. 1 Le marché du snacking - The snacking market has become the leading form of out-of-home dining, on par with collective catering. - Out of 160 meals consumed outside the home each year, 65 are snacks, 65 are canteen meals, and 30 are from traditional restaurants. - High-end ready-to-eat meals are experiencing above-average growth, particularly those excluding sandwiches and hamburgers. - Consumers spend an average of €29 per week (including VAT) on out-of-home dining. - Price is not necessarily the top priority, as long as consumers find a variety of choices (different formats, flavors, temperatures,...), suitable services (dining areas, online ordering...), and a handmade and authentic feel. ## DOC. 2 La nouvelle offre du rayon traiteur - **Un panier-repas à composer soi-même** - 2 mini-skewers (meat or tofu) - 1 bowl of cooked vegetables - 1 dessert of the day - All recipes are handcrafted with ingredients sourced from local producers, most of which are organic. - Packaging and cutlery are recyclable. - Delivery is possible (conditions: business district, minimum 3 orders). - Estimated pre-tax selling price: €8.50 / VAT:10% ## DOC. 3 La sensibilité-prix et sa mesure - Price sensitivity reflects consumer reactions to price changes. - The **price elasticity** (E) measures this sensitivity and its impact on demand. - $E = \frac{Variation~of~demand~(\%)}{Variation~of~price~(\%)} = \frac{\Delta Dde/Dde}{\Delta Px/Px}$ - **E = 0**: *No elasticity* - **E is close to 0**: *Low elasticity* - Demand is minimally sensitive to price changes. - Example: essential products (salt, bread). - **E < 1**: *High elasticity* - Demand is highly sensitive to price changes. - Example: products with close substitutes. - If the elasticity coefficient is positive, demand and price change in the same direction. If it's negative, demand and price move in opposite directions. ## DOC. 5 Le prix psychologique - The psychological price is the optimal price for which the maximum number of people are willing to buy a product. - It's determined by a survey asking two questions: - "Above what price would you consider this product too expensive?" - "Below what price would you consider this product to be of poor quality?" ## DOC. 4 Enquêtes sur la sensibilité-prix - **Price elasticity** - A 10% price increase results in: - 5% decrease in demand for high-end snacking - 9% decrease in demand for mid-range snacking - 12% decrease in demand for low-end snacking. - **Psychological price analysis** - 56% of 500 people surveyed were willing to pay €9.50 (including VAT) for a pre-packaged meal. - 54% of 500 people surveyed were willing to pay €10 (including VAT) for a pre-packaged meal. ## Avant la classe - Assuming the pre-tax price for a takeout meal is €8.50 and VAT is 10%: - What is the price including VAT? - What is the price the customer pays? - Who receives the VAT? ## Situation Bérengère and Thomas are seeking to quickly expand the sales of their takeout meals. After conducting extensive market research with local customers and consumers, they are seeking your help in making the right pricing decision. - **Questions:** 1. What are the expectations of consumers regarding snacking? 2. Does Bérengère and Thomas' offer seem to meet those expectations? Justify your answer. 3. Calculate the desired pre-tax selling price (including VAT) for the meal package. 4. Why is it important for Bérengère and Thomas to measure price sensitivity? 5. Considering that the new offer is positioned at the high end of the market, calculate the price elasticity in relation to demand. Briefly discuss the findings. 6. Based on the psychological price survey results, what price would yield the highest sales revenue? 7. Is the €8.50 considered a suitable price, taking into account the psychological pricing and elasticity? Provide guidance to Bérengère and Thomas. ## Allez plus loin! - To illustrate the impact of price elasticity, calculate the projected sales revenue using the table below, taking the given estimations into account: | Price (including VAT) | Quantity demanded | Sales revenue | Variation (%) | |---|---|---|---| | €9.35 | 5 000 meals | €46 750 | +10% | | €9.35 | 5 000 meals | €46 750 | -5% | - Analyze the outcomes and communicate your conclusions to Bérengère and Thomas. - Do you think the couple should rely solely on these analyses when setting their selling price? Justify your answer.