All products are price sensitive.
(If you don’t think your product is,
try increasing that price by a million dollars
and see if you lose customers)
So before increasing pricing,
we weigh the margin gained
against the sales lost.
If the net amount is positive,
then it makes financial sense,
at least in the short term,
to increase pricing.
However,
be very, very careful
when increasing pricing during a recession.
Not only are customers more price sensitive
(meaning more sales will be lost)
but the price increase is also more visible.
The media and the consumer advocates
are looking out for ‘selfish’ companies.
If you can,
wait for a recovery
to increase prices.