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product price increase

How to Implement Selective Product Price Increase in a Small Business 🎰


As market conditions shift, small businesses must adapt their pricing strategies to remain competitive and profitable. One of the biggest challenges small businesses face is raising prices without losing customers or sales. Selective product price increase presents an opportunity for them to navigate this challenge effectively and sustainably. These allow businesses to adjust prices strategically while maintaining customer satisfaction. 


>Download Now: Free PDF How To Drive Pricing Strategy To Accelerate Sales & EBIT Growth


Small businesses often struggle to execute selective price increases efficiently. Without the right skills, these strategies can backfire, resulting in unhappy customers and decreased market presence. However, with proper guidance, small businesses can overcome these challenges and implement price increases strategically. By addressing this issue head-on, businesses can avoid potential pitfalls and achieve sustainable growth.


In this article, we are going to discuss strategic pricing through a selective product price increase strategy in small businesses. First, we present the concept of selective price increases and their importance in pricing strategy. Then, we delve into the case of Danone’s strategy, such as product differentiation and alignment with growth objectives. We argue that by understanding the lessons from Danone’s strategy, small businesses can enhance their pricing practices and achieve sustainable growth.


At Value Culture, we believe that adopting a selective price increase approach can help small businesses maintain competitiveness while maximising profitability. By the end, you will know how to implement selective price increases effectively in your business to navigate competitive markets and achieve long-term success.

What is the Selective Premium Product Price Increase Strategy?


Strategic pricing is crucial for small businesses to thrive. A notable trend in this regard is Danone’s implementation of a new pricing strategy, which includes selective price increases. This approach showcases the significance of adapting pricing strategies to market dynamics.


Small businesses can learn valuable lessons from Danone’s strategy to address their own pricing challenges. By observing successful examples like Danone, small businesses can enhance their pricing strategies and achieve sustainable growth.


Danone’s strategy highlights the importance of being adaptable in pricing decisions. For instance, instead of blanket price increases across all products, Danone strategically selects products for price adjustments based on factors like market demand and product differentiation. This approach allows Danone to maintain competitiveness while maximising profitability.


Small businesses can emulate this strategy by analysing their product portfolio and identifying opportunities for selective price increases. For example, a small bakery may choose to increase prices for specialty cakes with unique flavour combinations that are in high demand, while keeping prices steady for everyday items like bread.


Moreover, Danone’s emphasis on aligning pricing with growth objectives is noteworthy. By ensuring that pricing decisions contribute to long-term business goals, Danone maintains strategic focus and drives sustainable growth. Small businesses can apply this principle by linking pricing strategies with their own growth objectives, such as expanding market share or increasing profitability.


Danone’s adoption of selective price increases reflects a broader trend in the business landscape, emphasising the importance of strategic pricing for small businesses. By learning from Danone’s approach and applying similar strategies, small businesses can overcome pricing challenges and position themselves for success in today’s competitive market environment.


How Small Businesses Can Successfully Execute a Selective Product Price Increase Strategy


Exploring Danone’s pricing strategy unveils a blueprint for success in the complex world of business pricing. By dissecting the key elements of Danone’s approach and distilling actionable lessons, small businesses can glean invaluable insights to refine their own pricing strategies and navigate the competitive marketplace effectively.


Key Elements of Danone’s Strategy


In Danone’s pricing strategy, several key elements stand out, each contributing to the company’s success in navigating the complex landscape of pricing.


1. Product Differentiation


Firstly, product differentiation is a cornerstone of Danone’s approach. By highlighting the unique value propositions of its products, Danone justifies premium pricing. For example, Danone’s Activia yogurt line is positioned as a premium product due to its probiotic benefits, allowing the company to command higher prices compared to generic yogurt brands. This emphasis on differentiation ensures that Danone’s pricing reflects the added value it offers to customers, enabling the company to maintain its competitive edge in the market.


2. Alignment with Growth Objectives


Secondly, Danone’s pricing strategy is closely aligned with its growth objectives. Every pricing decision is intricately linked to the company’s overarching goals for sustainable business growth. For instance, if Danone aims to increase market share in a particular segment, its pricing strategy will focus on capturing market demand while maximising profitability. This alignment ensures that price increases contribute directly to the company’s long-term success, guiding its trajectory in the competitive marketplace.


3. Price Governance


Thirdly, Danone places a strong emphasis on price governance. The company maintains strict control over pricing decisions to safeguard its brand integrity and profitability in negotiations. By adhering to established pricing protocols and standards, Danone ensures consistency and fairness in its pricing practices, fostering trust and credibility among customers and partners alike.


product price increase


4. Collaborative Partnerships


Lastly, collaborative partnerships play a vital role in Danone’s pricing strategy. By leveraging both internal and external partnerships, Danone fosters cooperation and alignment across various stakeholders. For example, Danone collaborates with retailers to develop joint promotional campaigns or co-create new products, ensuring mutual benefit and support for its pricing initiatives. These collaborative efforts enable Danone to adapt quickly to market changes and seize opportunities for growth while maintaining strong relationships with its partners.


Selective Product Price Increase Lessons for Small Businesses


Small businesses can glean valuable lessons from Danone’s pricing strategy to enhance their own pricing practices and achieve sustainable growth.


Product Price Increase Strategy #1: Embrace Differentiation


Firstly, embracing differentiation is paramount. Small businesses should identify and highlight their unique value propositions to justify premium pricing and distinguish themselves in competitive markets. For instance, a boutique coffee shop may emphasise its locally sourced, organic beans to justify higher prices compared to chain coffee shops.


Product Price Increase Strategy #2: Align Pricing with Growth Goals


Secondly, aligning pricing with growth goals is essential for long-term success. Pricing decisions should be closely tied to broader business objectives, ensuring that price increases contribute to the company’s overall growth strategy. For example, if a small tech startup aims to expand its market share, its pricing strategy may focus on competitive pricing to attract new customers while maximising profitability.


Product Price Increase Strategy #3: Protect Brand Integrity


Furthermore, protecting brand integrity is crucial. Small businesses must maintain firmness in negotiations and uphold their brand reputation to preserve customer trust and loyalty. For instance, a small artisanal skincare brand may resist pressure from retailers to discount its products excessively, ensuring that its brand image remains associated with quality and exclusivity.


Product Price Increase Strategy #4: Address Market Segmentation


Finally, addressing market segmentation is key when implementing selective price increases. Small businesses must carefully consider the diverse needs and preferences of different customer segments to ensure that value propositions resonate effectively. For example, a clothing retailer may offer tiered pricing for its products, catering to both budget-conscious shoppers and those willing to pay premium prices for designer labels.


How to Reap the Benefits of a Selective Premium Product Price Increase Strategy


Pricing focus and planning are crucial for small businesses to thrive in today’s competitive market landscape. By recognising the importance of pricing focus, businesses can align their pricing strategies with market dynamics and customer demands. Comprehensive pricing plans serve as roadmaps, guiding businesses in setting prices that reflect the value of their products or services.


Moreover, pricing focus allows small businesses to maintain competitiveness. By carefully analysing pricing trends and competitor pricing strategies, businesses can position themselves strategically in the market. This ensures that they offer competitive prices while still maintaining profitability.


Additionally, pricing focus enables businesses to achieve sustainable growth. By consistently reviewing and adjusting pricing strategies in response to market changes, businesses can capitalise on emerging opportunities and mitigate potential risks. This proactive approach to pricing ensures that businesses remain agile and adaptable in the face of evolving market conditions.


Furthermore, developing comprehensive pricing plans fosters transparency and consistency in pricing decisions. This instils trust and confidence in customers, enhancing brand reputation and customer loyalty.


Small- and medium-sized firm employees frequently have their hands full of workloads. But, our findings show that with the right set-up and pricing plans, incremental earnings gains can begin to occur in less than 12 weeks. After 6 months, your teams can capture at least 1.0-3.25% more margin using better price management processes. After 9-12 months, businesses often generate between 7-11% additional margin each year as they identify more complex and previously unrealised opportunities, efficiencies, and risks.


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Bottom Line


Danone’s pricing strategy offers valuable insights for small businesses. By focusing on product differentiation, aligning pricing with growth objectives, and maintaining price governance, Danone achieves sustainable growth. Small businesses can learn from Danone’s approach by prioritising strategic pricing to navigate competitive markets effectively.


Additionally, collaborative partnerships play a crucial role in supporting pricing strategies and fostering growth. Overall, strategic pricing is essential for small businesses to succeed and remain resilient in dynamic market environments. By implementing similar strategies, small businesses can enhance their competitiveness, attract more customers, and achieve long-term success.


For a comprehensive view of ensuring the continuous growth of your business, Download a complimentary brochure on How To Drive Pricing Strategy To Accelerate Sales & EBIT Growth.


Are you a small or medium-sized business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 8607 7001.

You can also email us at if you have any further questions.





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