How do companies implement inflation-related price increases?

Authors: Prof. Dr. Hans-Christian Riekhof and Leon Reutel

Price increases have been a highly topical and also explosive issue for months. Shortages of electronic components, drastic price increases for many materials, skyrocketing sea freight rates, price increases due to the war in Ukraine for gas, oil and electricity, at the same time trade union wage demands on an unprecedented scale: This is the environment in which companies have to pass on their increased and presumably also further increasing costs to their customers.

But how are such price increases implemented? Are the responsible executives prepared for “Inflation Pricing”? Do they act quickly and consistently enough? Do they have a strategic concept for the procedure? How differentiated do they implement price increases?

Price adjustments have always been a strategically important component of a comprehensive pricing strategy. They are at the center of the present study, in which we have focused for the first time on a single pricing process, namely price adjustments. In the pricing studies we conducted in 2012, 2015 and 2018, the price adjustment process was one of many pricing processes. In this study, we are exclusively interested in the aspect of price increases.