A Critical Review of Consumers’ Sensitivity to Price: Managerial and Theoretical Issues

Consumers’ pricesensitivity is an important input to strategic and tactical decisions. Price sensitivities depend on various factors for which our purpose of this paper is to explore consumers’ price sensitivity and innovativenessas well asto contribute to diffusion theory by adding information on price sensitivity.This research reviews how consumers demonstrate their sensitivities to price on their product purchase decisions. Consumer’s sensitivity to price has a significant impact on product innovativeness asmost of theproduct purchase decisions are being made based on price rather than the brand or accessibility. Our discussions and findings will have important implications for managers and researchers. Managers may get guidelines for taking their pricing decisions to achieve maximum earningswhile researchers can go for further study.