Van Westendorp Price Sensitivity Meter

How the method works

Respondents see a product and answer four questions: At what price would it be so cheap that you would doubt its quality? At what price would it be a bargain? At what price would it be expensive, but you would still consider it? At what price would it be so expensive that you would no longer buy it?

The cumulative answers produce four curves. Their intersections give an accepted price range as well as reference points such as the optimal price and the indifference price. A common extension also asks about purchase likelihood in order to estimate rough demand and revenue curves (Newton, Miller & Smith 1993).

Why this matters for your decision

Van Westendorp is fast, inexpensive and easy to explain. The method narrows down early the range within which a price should be discussed at all, and shows the point at which a price triggers doubts about quality. That is useful in the early phase and for categories without a clear reference price.

For the final pricing decision it is rarely enough. The method delivers assessments, not demand per price. It says which prices are considered acceptable, not how many people actually take up the offer at which price. Stated willingness to pay is on average higher than real willingness to pay (Schmidt & Bijmolt 2020).

Example

For a new current account with additional services, a Van Westendorp survey yields an accepted range of €4 to €9 per month. This narrows down the behavioural test: €4.90, €6.90 and €8.90 are tested.

The test shows that measured sign-up intent at €6.90 is barely lower than at €4.90, but drops clearly at €8.90, even though this price was still considered acceptable in the survey.

How it differs

Gabor-Granger asks about willingness to buy at specific price points and thus delivers a stated demand curve. Van Westendorp delivers a range without volume. Conjoint analysis derives price acceptance from choices between product profiles.

A behavioural test measures purchase intent per price. The two approaches complement each other: Van Westendorp narrows the range, and the behavioural test compares the prices that are ultimately up for choice.

Limitations

The answers depend heavily on known reference prices. For genuinely new offers this reference is missing, and the range then often becomes very wide. Respondents do not see a concrete price in a buying situation or any alternatives; they name numbers. The intersections are conventions, not measured optima.

A behavioural test has limitations too: it only checks the price points tested and is not suited to products that are chosen on the shelf next to competitors.