KLP is developed on the basis of Price Sensitivity Measurement (PSM). Price Sensitivity Measurement (PSM) is a method to measure consumers' perception of price for a product or a brand, which is used to subdivide
consumer price feelings. In the PSM method, consumers are asked to provide feelings about product price at four
different levels: to buy. The frequency of each question on a different price point is calculated. Based on the collected data, frequency distributions were analyzed and relative cumulative frequency curves were established as shown in figure 3. Curve crossing point is the price threshold point, and eventually we can get an acceptable price range, the optimal price point and no-difference price point (Kishi, K., Uchida, K., and Satoh, K., 1999). However, we cannot make detailed evaluations in PSM on the price range that is not included in the subjects' responses.Kishi's logit PSM (KLP) has improved PSM through applying four relative cumulative frequencies that are regressed by using the logit model as indicated by equation (1) and equation (2). The resulting curves are shown
in Figure 3. When a dependent variable lies between 0 and 1, it is equal to the relative cumulative frequency. As the logit model is a continuous function, KLP can circumstantially analyze consumers' evaluation on any prices.