6.1
Van Westendorp PSM
A four-question survey technique that derives an acceptable price range from judgements of too expensive, expensive, cheap and suspiciously cheap.
Peter H. van Westendorp, ESOMAR Congress, Venice (1976)
What it does
Four questions — too expensive, expensive, cheap, suspiciously cheap — produce an acceptable price range. Fast and cheap to run.
When it breaks
Measures stated intention, not behaviour; systematically inflates the upper bound; ignores competitor prices and context. It gives you a range, never a price.
Case
Kloss and Kunter tested the PSM against directly measured willingness-to-pay on a real confectionery product. The optimal price point tracked WTP reasonably, but the technique produced no purchase-probability estimate — confirming it bounds a range rather than predicting demand. Published PSM cases with hard commercial numbers are genuinely scarce; the work is nearly all proprietary.
Kloss & Kunter — PSM as a WTP measure ↗Diagram — not yet drawn
The four cumulative curves with the acceptable range marked — and the region above it shaded as the known upward bias, which the standard chart omits.
In the wild
Unvetted · not part of the tier assessment
What has been written about this tool in the last twelve months. Machine-retrieved and unchecked — everything above this line was checked.
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