fbpx

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.

Digital Marketing

Digital Marketing

Analysis finds social media used by less than 4% of people, while mobile phone connections are equivalent to less than 60% of Malawians.

Read More »
E-commerce

E-commerce

E-commerce giant is yet another tech company that is finding the market increasingly tough. It has already cut 18,000 jobs.

Read More »
Customer Data

Customer Data

Survey finds 60% of marketing leaders believe collecting customer data while balancing privacy and customer value is now more challenging.

Read More »
Consumer Health

Consumer Health

It is not sufficient for consumers to want to decrease sugar intake. Brands should offer appealing products that help reduce consumption.

Read More »
Influencers

INFLUENCERS

Some influencers, themselves sufferers of an ailment, give well-intentioned advice. Others are paid to do so. The consequences are concerning.

Read More »
AMC News

AMC News

High-level Chartered Marketer (Africa) programme equips marketers to operate successfully in the continent’s complex and diverse markets.

Read More »
Email marketing

Email Marketing

Analysis of more than 10-billion bulk emails sent over three years finds a ‘landscape fundamentally reshaped’ by events.

Read More »