Georgia State University Advertise the Price Increase Discussion


The price increase is influenced by various factors such as improved quality, increase operational costs and additional services. There are various measures which business can undertake when increasing their product prices without losing their customers. From the above video, Bob Prosen author of the book, ‘Kiss Theory Goodbye’ explain the various economic concept in which business can successfully raise their prices and still have customers retention (MSNBC, 2008). Some of the concepts include early communication to customers, the benefitto product or services offered.

Communication of a product to a customer on the intention to increase the product’s price increases product awareness in various ways. This is necessary to prevent the customers from finding price increment from the invoice. Price increase communication can be communicated by either the account executive or an executive manager of the company. This will allow the customers to make adjustment in their budgeting system and exercise an additional order at the actual price (Hunter, 2019).

A business which intends to increase the product price, it is advisable to add some value to the product as well. The company should listen to the review and the complaints of customers and use them to make the necessary adjustment on the products. One of the change may include improvement in product characteristics. This is because customers are more willing to accept an additional price for an improved product(Caramela, 2018).

Market power is the ability for a business to increase its profit by setting its price above the marginal cost. Based on my rationale, businesses that possess market power produce goods without a perfect substitute in terms of product characteristics. This enables such firms to be price setters instead of price takers. This happens when the business is monopolies. In real-world competition, any enterprise can set its product price. However, it’s a disadvantage for business to deviate from the market price. This is because, in a competitive market, businesses producing similar product contribute a share to the market. Increase in price will result from dropping in sales.


MSNBC (2008).How to raise prices without losing customers. Retrieved from

Caramela, S. (2018). Three Tips on Raising Prices Without Losing Customers. Business News Daily.



Raising prices on any product can be risky.Most organizations will come to a point where the product they are selling will need to increase in price.The way this is done can be crucial to the company.According to the video, there are some concepts that need to be used in order to maintain the customers they already have.

The concepts Mr. Prosen addressed were the following;

  • Advertise the price increase first before just raising the price and catching the customer off guard.
  • Let the customer now why the prices are increasing.If they understand then they are more willing to accept the price increase.
  • If the product of the price increases, then make sure the benefits of the product are still higher.
  • Research what the competitors are charging.Don’t undercharge for your product when your competitors are charging much more. “Customer service always play a major factor in keeping customers.If the customer feels important and their issues are always addressed, then they will be ok paying a little more if the price is increase.For example, I was researching a company named Wunder 2 that sells makeup products.The statements listed on the product were very good, however; the customers gave the company very bad reviews due to customer service.The company took a long time getting the product to the customers and the service help line was not respectful and did not help the customer at all.The reviews also stated they would not purchase from this company again due to the customer service.I have learned through my work experiences communication with the customer is very important. Grandfather prices is another way to raise prices and keep existing customers.“If you have long-term customers who’ve been loyal from the start you should make exceptions for them” (Caramela, 2018). This will show the customers that you value their loyalty to the product.If, however it’s not feasible to keep the older customers at the same price then offer them a twilight period with advanced notice.I never understood why in most product advertising that the new customers always got the good savings when they sign up for the service.Why not offer the ones that have been with the company for a long time to receive the same discounts. Don’t trap the customer. “Most companies have annual contracts. It should be common, sense, but don’t lock a customer into an agreement then change a rate in the middle – even if you can find a legal way to do so” (Gray, 2017). An example of this is, DirectTV will over offer a great deal for a year and then double the charges for the next 24 months.In 2015, AT&T bought DirectTV and Time Warner Inc. in 2018.AT&T told the Department of Justice that the merge will enable the company to reduce prices.“Instead, AT&T raised prices for DirectTV Now multiple times” (Brodkin, 2019).This price increased lost 946,000 TV subscribers in Q2 2019.ReferencesCaramela, S. (2018). 3 Tips on Raising Prices Without Losing Customers. Business News Daily. References from, J. (2019). AT&T loses nearly 1 million TV customers after raising DirectTV prices. Referenced from J. (2017). How to Raise Prices Without Losing Customers. Referenced from

Prosen, B. (2008). How to Raise Prices Without Losing Customers [Television Broadcast]. New York, NY: MSNBC.

Hunter, M. (2019). How to Sell a Price Increase to Your Customers. The Balance Small Business.

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