Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Benjamin

100% Recommendation Rate

55 Meetings

517 Q&A Upvotes

USD 319 / Coaching

3

When is the "increase in prices" a solution for sales' decline? In other words, what are the things that I should keep in mind before choosing this particular solution?

3 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Benjamin

100% Recommendation Rate

55 Meetings

517 Q&A Upvotes

USD 319 / Coaching

Hi,
I think Vlad did a very good job with listing the drivers.
I would only add to his answer that you need to consider the type of business.
In general price increase can be better managed in B2B businesses applying price differentiation to the different customers (size x industry)

BEst

Benjamin

Hi,
I think Vlad did a very good job with listing the drivers.
I would only add to his answer that you need to consider the type of business.
In general price increase can be better managed in B2B businesses applying price differentiation to the different customers (size x industry)

BEst

Benjamin

(edited)

Book a coaching with Vlad

97% Recommendation Rate

411 Meetings

11,459 Q&A Upvotes

USD 239 / Coaching

Hi,

You should keep in mind several factors:

  • Overall strategic objective - are we trying to increase market share or profits?
  • Nature of the product - mass vs premium
  • Price elasticity. In other words - what is the relationship between price and volumes and what are the implications of the price increase for overall revenue
  • Price perception and willingness to pay - how does the customer perceive the price?
  • Competitors pricing - will the customers switch to competitors?
  • Product differentiation and pricing tiers. What is the role of the product in your portfolio? Maybe the price should be low but you can earn more on cross-selling
  • Government regulations

Best

Hi,

You should keep in mind several factors:

  • Overall strategic objective - are we trying to increase market share or profits?
  • Nature of the product - mass vs premium
  • Price elasticity. In other words - what is the relationship between price and volumes and what are the implications of the price increase for overall revenue
  • Price perception and willingness to pay - how does the customer perceive the price?
  • Competitors pricing - will the customers switch to competitors?
  • Product differentiation and pricing tiers. What is the role of the product in your portfolio? Maybe the price should be low but you can earn more on cross-selling
  • Government regulations

Best

There are external factor that may affect the pricing strategy.

You should keep in mind:

-What other competitors are doing? Are they increasing pricing or not?

-What's your positioning in the market? Is it a low cost or premium brand?

-What customer really wants and their willingness to pay.

Sometimes sales are strongly related to brand perception where price is one of the main drivers.

There are external factor that may affect the pricing strategy.

You should keep in mind:

-What other competitors are doing? Are they increasing pricing or not?

-What's your positioning in the market? Is it a low cost or premium brand?

-What customer really wants and their willingness to pay.

Sometimes sales are strongly related to brand perception where price is one of the main drivers.

Related case(s)

Oliver Wyman Case: Setting up a Wine Cellar

Solved 61.8k times
Oliver Wyman Case: Setting up a Wine Cellar I’m thinking about setting up a wine cellar in my basement. The way I see it, shelf space would be divided into two sections: (1) a “drinking” section where I store bottles for my own consumption and (2) an “investment” section where I store bottles that I intend to sell at a profit after they appreciate in value several years down the line. The idea is to earn enough money with the “investment” section of the cellar in order to subsidize whatever I consume in the “drinking” section over time.   I'm obviously constrained by several things: the amount of money I am able to spend, the amount of wine I can (or want to) drink, the space available for the cellar, and so on.
4.3 5 3629
| Rating: (4.3 / 5.0)

I’m thinking about setting up a wine cellar in my basement. The way I see it, shelf space would be divided into two sections: (1) a “drinking” section where I store bottles for my own consumption and (2) an “investment” section where I store bottles that I intend to sell at a profit after they appre ... Open whole case

DHL Consulting case: Bike Shop

Solved 56.2k times
DHL Consulting case: Bike Shop You have been hired to support the owner of a bike-shop as a business consultant. The bike-shop has suffered a significant revenue decline during the last year, and now the owner would like you to assess the situation and options for the way forward. They want to know last year’s profit, i.e. how it was affected by the revenue decline, and what the priority actions are to survive the next year. (short term) In addition they would like to understand the strategic competitive position of the shop better and how to increase revenues again mid- to long-term.
4.3 5 11546
| Rating: (4.3 / 5.0)

You have been hired to support the owner of a bike-shop as a business consultant. The bike-shop has suffered a significant revenue decline during the last year, and now the owner would like you to assess the situation and options for the way forward. They want to know last year’s profit, i.e. how i ... Open whole case

Simon-Kucher Case: GST Cruise Company

Solved 6.8k times
Simon-Kucher Case: GST Cruise Company Cruise company German Sea Tours (GST) is a successful operator of international cruises. GST currently offers several cruise trips, lasting between 5 and 24 days. Additional services can be booked on board (e.g. excursions at each destination, onboard leisure activities). Customers tend to book their tickets several months in advance. GST has had a long history of revenue growth, but in the past five years, it showed lower growth rates. Board members are not sure whether the market, in general, saw lower growth or whether the problem is specific to GST. GST recognizes that winning new customers and stimulating existing customers to book their vacations with GST is crucial for future growth and therefore has always focused on keeping a close relationship with its (potential) cruise-trip bookers. GST’s chief commercial officer (CCO) Ms. Brown has hired Simon-Kucher & Partners to assess the market environment and competitive positioning for cruise ships and to conduct a subsequent evaluation of potential growth options.
4.5 5 105
| Rating: (4.5 / 5.0)

Cruise company German Sea Tours (GST) is a successful operator of international cruises. GST currently offers several cruise trips, lasting between 5 and 24 days. Additional services can be booked on board (e.g. excursions at each destination, onboard leisure activities). Customers tend to book thei ... Open whole case

Volkswagen Consulting Case: Wo soll produziert werden?

Solved 4.9k times
Volkswagen Consulting Case: Wo soll produziert werden? Ihr Kunde ist in einem globalen Automobilkonzern dafür verantwortlich ein neues Produkt mit einem Volumen von 140.000 Fahrzeugen über den gesamten Produktionszeitraum auf den Markt zu bringen. Bedingt durch finanzielle Anspannung liegt ein besonderer Fokus auf den Kosten.
4.3 5 90
| Rating: (4.3 / 5.0)

Ihr Kunde ist in einem globalen Automobilkonzern dafür verantwortlich ein neues Produkt mit einem Volumen von 140.000 Fahrzeugen über den gesamten Produktionszeitraum auf den Markt zu bringen. Bedingt durch finanzielle Anspannung liegt ein besonderer Fokus auf den Kosten. Open whole case

Bank envelope

Solved 59.7k times
Bank envelope Your client, Customlope, is the leader in the US secure envelope manufacturing industry. Banks buy these envelopes for operations such as money deposits and high value transactions. Next year, a new digital technology will reduce the overall number of units sold in the industry by 25%. In the short term, our client wants to maintain his current profit level without investing in the new technology. How can you help him?
4.5 5 2475
| Rating: (4.5 / 5.0) |

Your client, Customlope, is the leader in the US secure envelope manufacturing industry. Banks buy these envelopes for operations such as money deposits and high value transactions. Next year, a new digital technology will reduce the overall number of units sold in the industry by 25%. In the shor ... Open whole case