Brands and brand managers must learn to embrace the more inflationary environment.
Image: Shutterstock
For a long time, growth for established companies in mature markets hasn’t been easy to come by. Still, the pressures to grow are very real. So brands have attempted to increase their margins by launching spin-off products, or quite often by cutting costs.
One strategy that was rarely feasible in the low-inflation environment, however, was increasing prices.
“If you walked into a retailer and said you were taking the prices up, the retailer would be just furious and they would punish you for doing that,” says Tim Calkins, a clinical professor of marketing at Kellogg. “An honest-to-goodness, old-fashioned price increase hasn’t been on the table for so many companies for such a long time.”
[This article has been republished, with permission, from Kellogg Insight, the faculty research & ideas magazine of Kellogg School of Management at Northwestern University]