Riding Out the Storm
Source: McKinsey & Company
Pricing is a powerful and often neglected tool that is again attracting attention. But pricing power sounds at first pass like an oxymoron for many companies today. How can they raise prices when the consumer is worried about the economy, big retailers are extracting ever more from suppliers, the Internet has made prices increasingly transparent, and manufacturers in emerging markets are so cost-competitive? The answer is to stop charging higher prices across the board, a nonstarter and instead get the price right, one customer, one transaction at a time.