The Right and Wrong Way to Increase Prices
SPG Insights
Fall 2004

Abstract:
Looking back at the forecasts for 2004, there's an almost tangible feeling of relief: for some companies, the widely predicted economic recovery is beginning to materialize. Along with the recovery, many firms are now trying to grow profits through price increases. Certainly the business environment we're experiencing supports the ability to raise prices. And that's where the challenge emerges: many of the price increase announcements are being poorly executed. The majority of announcements cite higher costs as the reason for increasing prices. The problem with this approach is that it sets the stage for future price sensitivity and demands for price concessions.

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