Pricing is critical to any business. As consumers are being forced to stretch their dollars, companies have an opportunity to drive value by reassessing their pricing strategies to make them more reflective of the current macroeconomic environment. Consumer businesses have faced dramatic increases in input costs over the past 24 months, primarily due to the lingering impact of COVID-19. To avoid profit erosion, most responded by passing these cost increases on to consumers in the form of higher prices. But consumers, concerned with a potential recession, are adjusting their spending behaviors.
According to L.E.K. Consulting’s 2022 Inflation Inflated: Part 2 — The Business Outlook survey, profit margins faced significant pressure if business leaders failed to respond with appropriate pricing actions. Business leaders should begin by reviewing pricing principles and asking themselves how they can make pricing a strategic lever that drives revenue and margin growth.
This special report lays out several pricing strategy concepts and case studies to demonstrate how consumer businesses have put best practices into action — namely, by extracting maximum consumer willingness to pay through value-based pricing principles.
Please download the report to view the analysis.