Essays on How to Raise Prices without Alienating Customers Coursework

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The paper "How to Raise Prices without Alienating Customers" is a good example of marketing coursework. In the recent past, most of the consumers have become highly price-sensitive to products or services they consume. This is due to increased know-how, especially in the area of technology, which has enabled customers to easily shop for quality products and services at reduced prices. Further, customers spending abilities have drastically reduced as a result of increased food and fuel prices in the international markets, thus leading to raised price sensitivity levels. Rundle-Thiele & Waller (2010) indicates that pricing is a process that determines what will be received by a business in exchange for products or services offered by the firm.

The main factors, which affects pricing includes manufacturing costs, competition, market place, quality of products, prevailing market condition among other notable aspects. Price is one of the most important elements of all four Ps of the market mix, namely product, place, promotion and price, is the only element that generates revenues. Therefore, most of the business owners are sensitive to the aspect of pricing, as failure to do this will affect the theory of business continuity.

It is worth noting that, over 80% of businesses that increases prices on products ends up losing a substantial number of their customers, resulting to a 20% decrease on annual revenues. This is due to the fact that 20% of annual revenues in a firm originate from 80% of the firm's loyal customers (Schullz, & Lauterborn 2003). Based on this aspect, most of businesses owners categorically explore other possible avenues of reducing the operational costs, as opposed to increasing prices to remain profitable.

Others spend time to keep, customers’ o the loop regarding possible price increase so that when the prices are increased, this does not come as a surprise to the customers. This paper will critically evaluate ways of increasing price without alienating customers (Chekitanm 2005). Reasons for increasing prices There are many reasons why businesses are increasing the prices of their commodities in the recent past. The most important aspect is the increase in operational costs resulting from raised prices of fuel in the international markets.

For instance, since the onset of global economic meltdown that started in developed countries such as the US and Europe, the price of crude oil has increased by more than 20% to approximately $ 100 per barrel. Consequently, the operational cost of has drastically surged for most of the companies, resulting in reduced profitability levels over the last three years. For instance, global companies such as General Motors, Royal bank of Scotland, British Airways among other notable firms are affected by the increased operational costs, a factor which has necessities bailouts from their respective governments (Dennis 2001).

The other factor that has resulted to increase in prices is the need for improving on existing quality of products or services offered. Global and domestic companies have realized the fact that majority of the customers, seeks to purchase good quality products despite the high prices. The main reason for this is that good quality product lasts for longer duration as well as offers improved services as opposed to low-quality products. Further, there is the notion that high-quality products are those sold at higher prices and the vice versa.

Other factors that result in increased prices of products and services includes raised inflation rates in most economies leading to raised borrowing rates from financial institutions among other notable aspects (Paladino 2005).


Chekitanm, D. 200. In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century. London: Rutledge Publishers.

Dennis, A. 2001. Introduction: Marketing principles and practice. Pretoria: Macmillan Publishers.

Paladino, A. 2005. Marketing Core Concepts and Applications: Asia-Pacific. Sydney: John Wiley & Sons.

Powell, G. 2008. Marketing Calculator: Measuring and managing your return on marketing investment. Chicago: Chicago University Press.

Rundle-Thiele, S., & Waller, D. 2010. Marketing. Sydney: John Wiley & Sons.

Schullz, D, & Lauterborn, R. 2003. Marketing Communications. New York: NTC Publishing Group.

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