Apply Smart Pricing Tactics

Hermann Simon and Adam Echter
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Hermann Simon: Simon-Kucher & Partners
Adam Echter: Simon-Kucher & Partners

Chapter 10 in Beating Inflation, 2023, pp 81-90 from Springer

Abstract: Abstract Smart pricing tactics must be deployed to beat inflation. Price escalator clauses, smart contracts, and improved price differentiation will be the tactical keys to staying ahead of inflation. Inflation is likely to have differing impact on the willingness-to-pay of target groups. Consequently, the cumulative spread of price differences under inflationary conditions needs to be closely examined. Price differentiation is the higher art of pricing and should increase during inflation; less-expensive-alternatives should be introduced by premium brands to retain customers while not cheapening primary products. Not all tactics are appropriate in the face of persistent inflation; reduction of package size (a.k.a. shrinkflation) and high list prices plus large discounts are strategies that are unsuitable for the long-term. As business leaders shift tactics we encourage a test-and-learn approach.

Date: 2023
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DOI: 10.1007/978-3-031-20093-9_10

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