It is hard to disagree that firms’ leaders have to make uneasy decisions to keep their business stable and beneficial. One of the most severe issues that may need to be solved is the cost increases experienced by a firm, and a logical solution to offset them is to raise the prices for the products. The problem is that the stakeholders do not always agree to that, and price increases may have both positive and negative consequences.
In this particular case, there are several possible solutions that the stakeholders may approve and accept. Since this firm is one of a handful of manufacturers of specific products bought by a significant number of people, increasing prices is unlikely to harm future income and performance. However, making all products more expensive is irrational and can lead to the loss of the customers’ trust and loyalty (Ubel, 2019). Therefore, it is possible to suggest the stakeholders increase the prices only for several products that are available uniquely at this small firm but are necessary for the buyers. Simultaneously, the increase should be insignificant so that people do not replace them with other cheaper products or stop buying them at all.
After the prices are increased, it is a great solution to introduce some special promo codes, promotions, sales, or something else that can attract more customers and prove that this firm cares about its clients. For example, if one buys more than three products with an increased price, he or she gets free delivery or a discount on an adjacent purchase. If someone makes their friend buy for a certain amount, both persons receive a unique promo code valid for a couple of weeks. These methods will help attract new and old customers and justify the increase in prices.
Reference
Ubel, P. (2019). Here’s why pharmaceutical companies raise their prices so much. Forbes. Web.