When customers can easily compare prices, what effect does this have on their price sensitivity?

When customers can easily compare prices, it increases their price sensitivity. This is because ready access to price information empowers consumers to make comparisons across different products or brands with greater ease. As a result, they become more aware of price differences and are likely to respond to these differences when making purchasing decisions.

When customers recognize that they can obtain similar products for lower prices, their willingness to pay a premium for specific brands decreases. This heightened awareness of pricing structures and the ability to evaluate the competitiveness of a brand leads to more informed decision-making, making customers more likely to choose lower-priced alternatives.

In contrast, if customers were not able to compare prices effectively, they might remain less sensitive to price variations, potentially leading to brand loyalty based on factors other than cost. Therefore, the ease of price comparison fundamentally changes consumer behavior by fostering greater price sensitivity.