Chair of Strategy and Marketing

FAZ article by A.-K. Schmitz, M. Fassnacht and L. Schnabl

Using scope for higher prices - Because of inflation, providers need to charge customers more. But how?

The article “Spielraum für höhere Preise nutzen – Wegen der Inflation müssen Anbieter mehr Geld von Kunden verlangen. Aber wie?” (Using financial leeway for higher prices - Because of inflation, providers need to charge customers more. But how?) written by Jun.-Prof. Dr. Anna-Karina Schmitz, Prof. Dr. Martin Fassnacht and Lukas Schnabl has been published in the Frankfurter Allgemeine Zeitung on 18th October 2021 on page 16 in the section “Der Betriebswirt”.
 
In the article the authors explore different forms of corona-related price increases and how price managers should deal with them in different phases of the pandemic. In course of the pandemic we could observe various changes in consumer behavior that open up potentials for many companies to maintain corona-related price increases in the long term. Consumers increasingly value and demand attributes such as hygiene, safety and sustainability in products and services they consume.
 
That’s where premiumization strategies come in. Premiumization means adding value to a product or service that allows to charge a higher price (as a higher perceived value is reflected in a corresponding higher willingness to pay). That means a virtue can be made of necessity: If companies have to add value as a result from legal restrictions, why not communicate and monetarize them accordingly also after the removal of the restrictions? 

Read more in the article (in German): https://zeitung.faz.net/faz/wirtschaft/2021-10-18/spielraum-fuer-hoehere-preise-nutzen/676737.html

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