Customers are likely to react most strongly to price changes when:

Customers are likely to react most strongly to price changes when they are familiar with alternative offerings. This familiarity means that customers can easily compare prices and features among similar products. When consumers know what similar items cost, a price increase on one product can prompt them to consider alternatives, leading to a stronger reaction. If the price of a product they are considering rises, they are likely to look at competing products, which can result in a shift in their purchasing decision. This heightened sensitivity to price changes occurs because customers feel empowered to make informed choices based on their knowledge of available options.

In contrast, when a product is perceived to have low value, or when it is a luxury item, customer reaction to price changes may not be as pronounced. With luxury goods, consumers may associate a higher price with higher prestige or exclusivity, which can lead to less sensitivity. Additionally, if consumers have taken a financial risk, they may be less able to respond worriedly to price changes due to their current financial situation. Understanding the competitive landscape and the context of the product is crucial in assessing customer sensitivity to price fluctuations.