Pricing Issues And Company Price Management Practices

Pricing issues are discussed on this site under posts found in the “Pricing” category. As of this writing there are 23 previous posts regarding price management issues.

As well, various pages discuss the following aspects regarding price management:

Pricing And Profitability

Pricing Power

Signs Of Pricing Problems

On a monthly basis, the Federal Reserve Bank of Atlanta publishes report titled “Business Inflation Expectations” (BIE). This report highlights survey results from regional businesses’ views on various factors that impact profitability.  These factors include unit costs; unit cost expectations; inflation; sales levels; pricing issues, including profit margins; and other factors.

On this site, highlights of these surveys are seen in posts found under the “Profitability” category.

In the March 2019 report, a question asked firms to select from a list of statements describing various characteristics regarding price changes. As well, firms also provided their frequency of price changes.

Among the types of questions asked were whether prices were raised when costs increased, as well as the ability and cost to change prices.

The frequency of price changes is displayed, ranging from daily to annually, as well as on a multi-year basis and intermittent basis.

The most common response to each of the two categories of questions was that prices are raised when costs increased, and pricing changes are done on an annual basis.

These survey results are interesting as they raise the issue as to how often and for what reasons pricing changes are made. Of greater significance is whether these motivating factors are in fact optimal (i.e. is there room for improvement) with regard to the overall price management function. The answers to these questions should take into account a broad range of issues, including industry- and company-specific factors. Various metrics and analyses can be conducted to provide quantitative and qualitative answers to such questions.