Node Description
Price Sensitivity Node
The Price Sensitivity node is designed to take a set of Products in a Market and determine the sensitivity each Product has to a change in Price by each of the other Products.
The node systematically raises and lowers the Price of each individual Product. Each Target Product is taken in turn such that the Price of only one Product is changed in any given scenario. The impact of the Price change on each of the other Impacted Product’s Market Share and Profitability is then measured.
The Price Sensitivity node can also handle two special scenarios:
- the Target Price is set to be Free of Charge, and
- the Target Product is set to be Out of Stock.
This Community Node documentation assumes you have already downloaded the open-source KNIME analytics platform and installed the free Market Simulation (Community Edition) plugin. If not, start by returning to Getting Started.
Downloads
Top Rivals
The Price Sensitivity node can be used to determine which Competitive Products are most threatening to the Target Products. The Price Sensitivity node can also be used to identify the degree of Cannibalization suffered by a Target Product when a same-Store or same-Brand Product is discounted.
Inputs
Product Array
The starting Price is required for each Products in the Market. Price Sensitivity will be calculated based upon a deviation from this starting Price.
In this case, the Cost To Make (CTM) also defines the ‘Spacely Sprockets’ Product. These Dynamic Costs are considered by the Price Sensitivity node.
WTP Matrix
In addition to each of the Product’s WTP Customer Distributions, this ‘Input WTP Matrix’ can also contain two types of ‘Dynamic Cost’ Distributions (CTM = Cost To Make, CTS = Cost To Sell) that depend upon the Customers who Purchase the Product. These ‘Dynamic Costs’ are added to the ‘Static Cost’ from the ‘Input Product Array’ to calculate the Product’s Margin.
Node
Configuration
The user can set the method by which the Price of the Target Product will be changed. The Price can be raised/lowered by a percentage (default). The Profit Margin can be raised/lowered by a percentage (Cost data is required). Or the Price can be raised/lowered by a fixed amount. If the Price is to be set to ‘Free’ then the Target Product’s Price is set to zero. If the Product is set to be ‘Out of Stock’ then the Target Product’s Price is set to be infinity.
Market Size
The user can specify the output Market Size used to scale the Quantity sold, Revenue, and Profitability for each Product in the Market.
If ‘Set to total number of Customers in Product Array’ (default) then the Input Product Array must contain a ‘Quantity’ column.
Target Impact
The built-in node view lists the impact all Products in the Market have on the Quantity of a selected Impacted Product.
Outputs
Port-0 Sensitivity Array
The ‘Price Sensitivity Array’ lists the degree by which a change in Price of each Target Product will impact each of the other Impacted Products in the Market.
The results can be filtered by the impacted ‘Then Product’ row and type-of-impact columns.
These results show that a discount by Spacely Sprockets themselves will have the greatest negative impact on Spacely’s Profit. A discount by Cogswell Cogs would cause the greatest impact to Spacely’s Profit by a Competitive Rival.
Port-1 Purchased Products
The ‘Purchased Products List’ shows the list of Products purchased by each Virtual Customer. The user can use the views to hilite the Customers of interest who switched their purchase decision. These Customers who switched as a result of the Price Sensitivity change can then be further analyzed.
