Elasticity is defined as a value that describes or summarizes how sensitive the demand for a product is to price changes. Cross Elasticity and Own-Price Elasticity are key concepts to understanding market changes.
Own-Price Elasticity is the coefficient that describes the product’s intrinsic elastic behavior, i.e., its volume response to its own price change. Cross elasticity or cross effects is the impact of a product’s price changes on the demand for other products. Cross effects can be between products from your own portfolio (cannibalizations) or between products of your portfolio against competitors’ products.
Cross Elasticity and Own-Price Elasticity go hand-in-hand.
This module consists of:
- Predictive own-price elasticities for each cycle.
A cycle is a time interval (month) during which certain prices are applied. - Cross elasticities effects with own products (cannibalization) and competitors.
It’s important to highlight that the information is available at different levels thanks to the filter feature.