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PRICING STRATEGY

Rising production costs are forcing big brands to increase prices

By our News Team | 2022

Market forces have pushed some of the world’s biggest companies into charging their customers more. But for how long in this tenable?

Consumer goods companies around the world have been steadily increasing their prices to customers as their own costs rise. And, while they seem to have got away with it for the moment, the head of Coca-Cola has warned that there may soon be public push-back.

Coca-Cola CEO James Quincey warned during a call with investment analysts last week that the tide could be turning on consumers’ willingness to pay higher prices, CNN and other media outlets reported.

So far, businesses have been able to comfortably raise prices because of special circumstances, Quincey said. And consumers were less likely to blink at price increases on individual items when costs were going up across the board.

Pricing Strategy

Photo by Breston Kenya from Pexels

But he emphasised that the circumstances were temporary. 

“Eventually, it moves to another phase where there’s inflation and a squeeze on the income,” Quincey said. “It’s easier to do pricing in a stimulus environment where everyone else is going up. It’s much harder when there’s a real squeeze on income.”

However, Quincey’s comments don’t mean that Coca-Cola is shying away from price increases. “The company raised prices last year, and may do so again this year if needed,” CNN reported.

PepsiCo, arch-rival to Coca-Cola, is another that will be raising prices. In its own call with analysts last week, the company’s Chief Financial Officer, Hugh Johnston, confirmed that price rises could be “pretty healthy” in 2022 because of the rising cost of production.

According to Forbes business magazine, cereal-makes Kellogg and coffee brand Starbucks are among other big names planning price hikes in 2022.

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Dr Kin Kariisa

Group CEO - Next Media

Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

  • Other current and previous roles played by Dr Kin Kariisa:
  • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
  • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
  • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
  • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
  • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.