As the Indian rupee is depreciating against the dollar international retail brands will increase prices in the upcoming Autumn-Winter season.Numerous companies have already seen costs escalate but up until now they have been reluctant to respond with any price increases due to fear of price sensitive consumers.
The German sports lifestyle brand Puma for example, has seen costs escalate by 30% since January this year and will now increase prices by 10% as a result. Other international apparel and accessories brands such as Tommy Hilfiger and Zara are expected to raise prices as well.
Any change in price can have a big impact on operating profits which is why these decisions should be carefully considered before executed. Operating on a global scale like most of these companies are poses numerous pricing challenges especially when it comes to pricing in different countries with different currencies.
In order to execute the price changes in the most efficient and profitable way, many companies have realised that a pricing tool
is the best way to go forward when implementing pricing strategies.These international companies will of course face challenges when raising prices but it has been seen that customers are often willing to accept price hikes if they do not exceed 15%.
As we often argue at Stratinis, a transparent pricing approach has the potential to benefit both consumers and business – it is all about knowing how to set prices and what impact they will have on specific segments.