Brainstorming price increase

Question

What are some levers you can use to increase price per unit? Volume can increased by either increasing supply (being in all the right locations, distribution channels etc) or boosting demand (advertising, product quality improvement, customer service etc). Is there a way to split price increase options into logical drivers like this?

Answer 1

Good..you are going in the right direction. In addition to Demand & Supply buckets, consider this:

External

General inflation
Government regulation & taxes
Industry benchmarking to revise pricing
Competition pressure i.e. price above competiion or at par

Remember when you invest (e.g. marketing, new technology etc), price increase can happen to offset increased cost and maintain profit margins. So sometimes its easier to have a separate "Cost/Investment" bucket in your structure.

Answer 2

Hi there,

This is completely industry-specific

For example, if I'm a distribution company, I can deliver goods faster to increase prices. Alternatively, if I'm a retail company, I can market better and hire influencers to increase perceptions.

It's hard to be generic here (again, I highly encourage you to think critically based on the industry), however the main areas would be:

Improve quality - as in, be better at the things customers care about
Improve perception of quality
Eliminate competition

Answer 3

Overall pricing strategy (pay by product, time/volume license, use, after sale service, etc.)
Price setting
- Price to value: likely only possible if you're having a monopoly, e.g. fast food stall license fee charged to service providers in a football stadium
- Price to competition: Any market where you can differentiate buy customers still have the choice between competing offers
- Price to cost: commodities; also provides a profitability floor to the other two approaches
Price getting
- Enforcing discounting discipline with your sales force, reduce leakage through free goodies, etc.