4 things for brands to consider as inflation provides more opportunities for growth
Brands and brand managers must learn to embrace the more inflationary environment.
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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 is rapidly changing. Thanks to supply-chain bottlenecks and a tight labor market, the costs of doing business are going up. And that means that, for the first time in a long time, many companies are—or should be—thinking about raising their prices.
[This article has been republished, with permission, from Kellogg Insight, the faculty research & ideas magazine of Kellogg School of Management at Northwestern University]