COLLABORATIVE FOR CUBES™ BREAKS DOWN PRICE ELASTICITY

To remain profitable, companies must have pricing power. They must have the ability to raise prices while maintaining relatively stable unit sales. And at the 100,000-foot level, where CEOs are looking to examine the financial outcomes of their actions, B2B companies struggle to increase pricing power.

The concept of pricing power is associated with price elasticity, or price sensitivity. The more price-sensitive a consumer, the more negatively the consumer will react to an increase. Companies with higher relative pricing power find customers react less negatively to a price increase. Thus, they are able to maintain stable unit sales when they enact an increase.

 

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