Analysing Pricing Sensitivity in Consumer Goods


A leading company in the consumer goods sector aimed to understand the consumer behavior response towards the pricing of a specific product. They were keen on:

  1. Analyzing the price elasticity for two of their premier brands within the same product category.
  2. Developing pricing strategies that could benefit both brands, either when considered collectively or individually.


Sapience took a systematic approach:

  1. Consumer Behavior Survey: A comprehensive survey was designed to:
    • Assess the likelihood of customers switching brands based on price changes.
    • Gauge brand preference under varying price scenarios to understand price sensitivity.
  2. Analysis of Brand Price Change Impact: Post-survey, a deep-dive analysis was conducted to comprehend how brand price variations influenced consumer behavior. This led to the creation of an ‘indicator of the probability of switching’, which was juxtaposed with sales data for richer insights.

Key Findings:

  1. Critical Levels of Price Change: Sapience pinpointed precise price change levels that significantly impacted the consumer’s decision to stick with or switch the brand.
  2. Optimal Price Combination: Through the analysis, an optimal price combination was identified that promised to augment sales revenue for both brands without cannibalizing each other’s market share.


Armed with these insights, the client was able to make informed pricing decisions, leading to an uptick in sales and ensuring both brands thrived in the market.


Understanding consumer sensitivity towards pricing is paramount, especially when multiple brands co-exist within the same product category. Sapience’s systematic approach enabled the client to harness this knowledge and drive both brands toward greater profitability.