Blogcast #1: Three Lessons from a P&G Price Increase

<p><span style="font-weight: 400;">On April 20, 2021, the Wall Street Journal published an article titled</span> <a href= "https://www.wsj.com/articles/procter-gamble-will-raise-prices-in-september-11618916498"> <span style="font-weight: 400;"> </span><em><span style= "font-weight: 400;">Procter & Gamble Will Raise Prices in September</span></em></a><span style= "font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">Here are the first three sentences:  </span></p> <p><a href="https://ph.pg.com/"><span style= "font-weight: 400;">Procter & Gamble Co.</span></a> <span style="font-weight: 400;">this fall will start charging more for household staples from diapers to tampons, the latest and biggest consumer-products company to announce price hikes.  The maker of Gillette razors and Tide detergent cited rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.  The announcement, which came as P&G disclosed its quarterly financial results, follows a similar move last month by rival Kimberly-Clark Corp.</span></p> <p><span style="font-weight: 400;"> </span></p> <p><strong>“Blame costs. Announce your price increases. And watch your competitors.”</strong><em><span style="font-weight: 400;">- Mark Stiving</span></em></p> <p> </p> <p><strong>In these three sentences are three incredible lessons on raising prices.  </strong></p> <p><strong>Lesson 1: Blame costs</strong></p> <p><span style="font-weight: 400;">Costs probably did go up, but I would bet the costs went up much less than the price.  Costs are pretty much the only reason customers accept for price increases.  The truth is probably closer to this sentence.  “P&G will raise prices so they can make more profit because they believe their customers are willing to pay more.”  It’s probably true, but they could never say that.  </span></p> <p><strong>Lesson 2: Announce your price increases</strong></p> <p><span style="font-weight: 400;">Notice that last month Kimberly-Clark announced a price increase (and they blamed incre