Brands that raised prices are in danger of losing market share. Consumers face rising costs and may be less willing to pay more for name-brand products. Also, cheaper alternatives, such as private-label brands or generic products, are often available.
A study by Nielsen found that 66% of consumers are willing to switch brands to save money. And another survey by Kantar found that 40% of consumers are more likely to buy private-label brands than they were a year ago.
Of course, not all brands that raise prices will lose market share. Some brands have strong enough brand loyalty that consumers will continue buying them even if prices increase. Additionally, some brands can justify the price increase by offering new features or benefits.
However, brands that raise prices need to be aware of the risks involved. They need to make sure that the price increase is justified and that they have a plan to mitigate any potential loss of market share.
Here are some tips for brands that are considering raising prices:
- Do your research. Ensure that you understand the factors driving up costs and that you are not raising prices too high.
- Communicate with your customers. Explain why you are raising prices and what they can expect in return.
- Offer discounts and promotions. This can help to offset the price increase and encourage customers to continue buying your products.
- Invest in product innovation. This can help you to justify the price increase and attract new customers.
By following these tips, brands can reduce the risk of losing market share when they raise prices.
