Pricing is always important for any business, but in these hard economic times the role of pricing is crucial for a company to succeed or simply survive. In 2009, as home foreclosures, bank failures, and layoffs mounted, consumer spending habits changed to reflect the increasingly bleak economic climate. Large swathes of firms reacted by lowering prices. Amidst the sea of discounting, however, some companies, such as Abercrombie and Fitch, sought to maintain prices. Perhaps surprisingly, Starbucks recently chose to raise prices on its premium offerings, while simultaneously lowering the prices of it low-end products. What is the right strategy to survive and ultimately profit from a recession? We sat down with Ranjit (Jit) Singh from Deloitte to help understand how companies can approach pricing strategy in tough economic times.
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