Vol. 13 No. 1 (2024)
Original Research Article

Measuring price sensitivity to the consumption situation

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  • Teresa Candeias,
  • Hugo Alonso
Teresa Candeias
Lusófona University
Hugo Alonso
Lusófona University, University of Aveiro
DOI: https://doi.org/10.36253/wep-15236

Published 2024-04-16

Keywords

  • Wine,
  • Consumption situation,
  • Willingness to pay,
  • Sensitivity measure

How to Cite

Candeias, T., & Alonso, H. (2024). Measuring price sensitivity to the consumption situation. Wine Economics and Policy, 13(1), 97–107. https://doi.org/10.36253/wep-15236

Copyright (c) 2024 Teresa Candeias, Hugo Alonso

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Consumer segmentation is very relevant in the design of wine marketing strategies. Previous studies showed that there is a relationship between the consumption situation and the willingness to pay for a bottle of wine. In this sense, the consumption situation is considered a segmentation variable. However, price sensitivity in relation to the consumption occasion was not measured. In this paper, we propose four measures of price sensitivity to the consumption occasion. We illustrate how to compute them and discuss their advantages and limitations. One of the measures only discriminates consumers that are sensitive to the consumption occasion from those who are not. In turn, the other measures are more informative and make it possible to distinguish between different degrees of sensitivity. The proposed measures can be used to classify consumers and further improve the knowledge of wine marketeers and decision makers in the wine industry about them.

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