For those who don't know this term.
Price sensitivity can be defined as the degree to which consumers' behaviors are affected by the price of the product or service. Price sensitivity is also known as price elasticity of demand and this means the extent to which sale of a particular product or service is affected.
-https://www.readyratios.com/reference/analysis/price_sensitivity.html
So if a product is price sensitive, means if the price drops, people will tend to consume more of the item. Usually basic goods like food, entertainment, stuff... or vice versa.
If a product is price insensitive, means if the price drops or increases, the consumption doesn't increase or decrease by much. Like healthcare, if prices drop, I doubt people will want to see doctor more.
As I'm staying overseas, I tend to be more price insensitive. Meaning, even if the price is higher, I'll still be willing to pay for it. Even though I know I can get it cheaper elsewhere.
In SG, I'd probably have gone elsewhere to get the item or maybe made other decisions.
An example is my vehicle which I mentioned in my previous post.
I was willing to get a more expensive new vehicle instead of a used one cos it's convenient. I don't need to think about repairs or maintenance costs. I know who to call if i have any breakdown. Basically I remove some levels of uncertainty and I'm willing to pay for it.
Even though overall, I know that if I get an older vehicle, I would probably save more money if I learnt how and where to handle those other concerns I'm bothered by.
When I rented this apartment. I also got a more expensive place. It's in a more upscale area of town. It's supposedly safer. It's near my wife's workplace. It's right beside a shopping mall with a supermarket and eating places. It's really convenient and it's a newly built apartment.
So similar to the above example, I'm more willing to spend on these other things cos I'm in a new country and don't know how things work. So I rather pay for the convenience than to have to deal with other issues. Like I enjoy the option of going down to the supermarket to buy stuff if I need it on short notice. Although it's very normal for people in Houston to drive out to get stuff. It's not normal for them to stay near a supermarket. But I like that option, cos I'm used to it in SG.
During this COVID period.
When I go out and buy groceries, I'm also more willing to spend more on the same product.
If I go to Walmart I may get canned food at a cheaper rate than HEB, which is another supermarket.
However, HEB has cheaper and nicer fresh meat than Walmart.
Before the COVID period, I would go to Walmart for canned food and HEB for fresh food.
But now during COVID, I when I go to the supermarket, I just buy whatever I need regardless of the price difference.
I tend to go Walmart cos it is less crowded and the aisles are wider so I feel it's easier to keep my social distance from others.
So due to the COVID, I'm willing to pay more for slightly lower quality meats or other items like sauces, vegetables, fruits, whatever.
It's quite amusing to notice this change in myself cos I always make decisions based on price. And usually I wouldn't mind going to different supermarkets to get a good deal. Whereas now, I'm more casual about it. I don't buy stuff which are TOO much more expensive. But I'm still willing to pay a bit more which I never would have last time.
I suppose changing the circumstances around my life changes the decision making behaviour.
And that's interesting, cos people change all the time, as they grow older, maybe they are more willing to spend on certain things, and less on other things, maybe when they have kids they like to spend more on their kids, or if they don't have kids maybe they used to be frugal but they end up traveling more cos they have nothing else to do with their money.
I suppose that's what they call the "new normal" cos behaviours will change during this COVID period and people may get used to new things they buy during this period. Maybe they end up enjoying delivery now since they are used to it.
It's quite interesting to see consumer behaviours change during this period.
It's like when smart phones first came out. That opened a whole new market for apps and games.
And COVID may open a whole new market for other stuft that people never knew they "needed".
Like bubble tea delivery!!!
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