Inflation Shouldn’t Deflate Success: How Brands Can Deal with Rising Prices

By Josch Chodakowsky

The world is seeing price inflation on a scale that hasn't been experienced in 40 years. While brands may be tempted to resort to their old playbooks by raising prices, cutting margins, or sacrificing quality, the amount of data and visibility that brands experience now can help manage these difficult times. Nuanced information about markets, consumers, and suppliers allow marketers to choose where and when to change prices or margins, and provide an opportunity to optimize their promotions around the products most affected.

The resources below provide insight into how consumers are dealing with inflation, and how brands can positively respond.

  • Inflation and Risk Reduction: What Brands Can Do. Kantar, February 2022.
    The response of marketers to the current – and likely, future – jump in prices must be more robust than simply pivoting to value. The primary focus must be on reducing risk. Brands that measure up to this challenge by taking out the risk through a focus on losses (the loss of comfort, peace of mind, security, and assurance) will come through this wave of inflation stronger than ever and ready for a future of disruptions that will require more innovation and creativity.

    With a focus on the U.S. market but insights for marketers globally, this report looks at the main ways consumers will experience inflation this time round, and how brands can overcome these: the priorities to double down on in the current marketplace.

  • How Inflation is Changing Consumer Behavior. Ipsos, January 2022.
    With price inflation now at the highest it's been in 40 years, Americans are feeling the pinch, especially in gas and food prices. Naturally, consumers are adapting behaviors: eating even more often at home, using cheaper products, and shopping at retailers they perceive are doing better at managing prices. Just like COVID, inflationary pressure is not going to dissipate for at least the next six months. Retailers and manufacturers must build sustainable plans to manage the current situation. This report offers detailed insights from Ipsos' recent research and provides actionable tips for marketers. Sample finding:

  • How Consumers Are Responding To Inflation And How Your Business Should Adjust. Forbes, January 2022.
    For many years, the inflation rate in the United States has been relatively low, hovering around 2 percent. However, in recent months, that rate has increased dramatically, nearing 7 percent. However, if we measure according to the Bureau of Labor Statistics' methodology from 1980 that figure exceeds 13 percent.

    As prices rise more quickly than wages, many consumers are finding it difficult to afford basic needs. In order to cope with this new reality, consumers are taking a variety of steps. While some brands have responded to these shifts in consumer behavior with promotions and discounts, there are limits to how much they can cut prices before it affects the brand's image and long-term viability. This explores what brands should consider when it comes to inflation in the next few years.

  • 3 Strategic Options to Deal with Inflation. Harvard Business Review, January 2022.
    The classic response to inflation is to select one of three unattractive options. Managers can upset their customers by raising prices, upset their investors by cutting margins, or upset practically everyone by cutting corners in order to cut costs. Faced with this trilemma, most managers ultimately resort to raising their prices, then look for clever ways to mitigate the subsequent drama. Inflation in 2022 is a different story.

    Better analytics now allows companies to consider more sophisticated strategic responses to inflation. This article looks at three larger strategic responses: making changes to the product portfolio, repositioning the brand, or revamping the pricing model.

  • How to Deal with Price Increases in This Inflationary Market. McKinsey, January 2022.
    For many years, inflation rates in much of the world remained low, a relic of the 1970s that little concerned most procurement, supply-chain, and operations leaders. Specific commodities would experience sharp price increases, but those forces typically eased before they could trigger broad-based price pressures across swaths of the economy.

    However, that's changed, and merchants today are planning and buying for their categories amid one of the hardest inflationary environments industry has seen in decades. When a supplier brings a price increase to a merchant, especially in this economic environment, the buyer may not have the right tools, capacity, or time to determine whether a price increase is warranted.

    How can an organization know that short-term price increases are fair and in line with expectations? How can companies prepare to deal with the long-term consequences of inflationary markets? This explores some helpful tactics:


Josch Chodakowsky is a senior manager of research and innovation at ANA.

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