When is a consumer likely to be described as price sensitive?

A consumer is described as price sensitive when price significantly affects their purchase decisions. This means that changes in the price of a product will lead to noticeable changes in the quantity of that product that the consumer is willing to buy. Price-sensitive consumers tend to compare prices between similar products and are greatly influenced by discounts or increases in price.

In markets where consumers are price sensitive, businesses might focus on competitive pricing strategies to attract these buyers. For example, if two products are similar in quality but one is cheaper, price-sensitive consumers are more likely to opt for the less expensive option.

Other factors such as brand loyalty, quality perception, and availability of alternatives play different roles in consumer behavior. When brand loyalty is high, consumers may be less concerned about price and more focused on the brand they trust. If the perception of quality is low, consumers may still be hesitant to buy unless a lower price compensates for their concerns. Lastly, if alternative products are unavailable, the consumer has no choice but to purchase the available product regardless of its price. Thus, the key factor leading to price sensitivity is the impact of price on purchase decisions.