How to Benefit from a Planned Price Increase: Lessons from a 1963 Case Study

As the 1963 case "How to promote a price increase" shows, communicating a price increase can be an opportunity to promote the product and strengthen relationships with the trade.

“Notably, all the messages I received gave at least a few days’ notice before the changes [price increases] went into effect, so customers had one last chance to shop at the original prices — almost like a sale, except it wasn’t.” - Charlotte Cowles, 2022¹.

No matter the industry, the surrounding economic or political context, or the brand’s price image or equity, communicating a price increase is the bane of managers everywhere². By and large, they are afraid of communicating price increases to their channels and their customers, and many are not good at it³. There’s good reason; these days, price increases often result in social media outrage⁴ and fast and furious sales declines, even for storied brands⁵.

However, this need not always be the case. There are certain situations where price increases, and especially their communication to those affected, provide a distinct opportunity for the brand. This post is about dissecting one such case study from 1963. As I’ve written before, in business we focus so much on the future that we often don’t give enough attention to valuable lessons from the past. This case study provides a very different, optimistic perspective on communicating a price increase and gives some very good, pointed advice on what a company in a B2B setting should do to benefit from a planned price increase.

The case study, whose author is not given, was titled “How to Promote a Price Increase,” and originally appeared in the 15th November 1963 issue of Sales Management. It was reprinted in Taylor, B., & Wills, G. (1969). Pricing Strategy: Reconciling Customer Needs and Company Objectives. Its main lesson may seem counterintuitive to many readers at first blush⁶.

A price increase can have promotional advantages. It is not unusual for a company purposely to let it be known, well in advance, that its prices are going up. One reason for the tip-off: dealers will scramble to buy now at the lesser price, and create high-volume immediate sales…

Perhaps more important than the immediate success of the price promotion is the fact that the [company’s] managers and dealers have developed a closer working relationship.

On further consideration, however, this idea makes sense and jibes well with the Cowles observation at the top of this post. Treating price increases specifically, or price changes more generally, as promotional opportunities is more suitable in B2B settings, where this type of occurrence is a common scenario.

A manufacturer routinely runs a trade promotion and announces it well in advance, giving distributors or retailers the chance to delay buying for a while and then stock up during the promotional period (called forward buying⁷). In today’s incentive-driven, low-pocket-price world, preannouncing a promotion may resonate more than the idea of preannouncing a (permanent) price increase as a profitable opportunity. But it makes sense that the announcement of a straightforward price increase without a clear future trajectory (will the raised price come down afterward, or won’t it?) should work the same way as the announcement of a future price promotion.

The Set Up

The case “How to promote a price increase” describes a steam cleaning equipment manufacturer called Malsbary Manufacturing Company (MMC) that had to raise prices twice, once in 1961 and then again in 1963. Each time, it communicated the price increase to its dealers in advance. But the results in 1963 were far better than in 1961. Post-hoc, the case examines why. Let’s look first at exactly how good the 1963 results were for MMC.

Pre-price-increase sales this year overshadowed 1961 sales by 90 percent… The star district manager of this year’s promotion sold 85 units (prices starting at $600 per) v. 25 units two years ago. In terms of dollars, he quadrupled his 1961 record. Many of the company’s thirty-five district managers were not far behind him, either. A few dealers increased their purchases by as much as 1,000 percent.

This certainly seems like an impressive improvement. Next, the case delves into the reasons, starting with the framing of the price increase to the company’s dealers and the three objectives set by MMC’s sales VP, M. K. Dugener. In his words:

“The 1963 price-increase promotion, presented as a “Guaranteed Blue Chip Investment Opportunity” [to dealers], was dramatized in such a way that it fired our own people to action.”

The chutzpah of calling a price increase not only a “price-increase promotion” but a “Guaranteed Blue Chip Investment Opportunity” deserves our admiration (or contempt, if you are so inclined).

The Approach

The three objectives of this “investment opportunity” set out by Dugener are also interesting. They were:

1. Offer targeted dealer incentives. If the dealer orders a certain number of MMC’s smaller, cheaper steam cleaners, they would get an incentive. The idea was that dealers could sell these steam cleaners on their own without any need for assistance from Malsbary’s sales staff.

2. Offer targeted sales staff incentives. Concurrently, incentivize MMC’s sales staff. As Dugener put it: “Provide a stimulus for the Malsbary men to go after this business.”

3. Mitigate the post-price-increase sales slump. One of the trickiest aspects of a trade promotion is the deleterious operational impact of forward buying by retailers. Despite the many important functions served⁸, many manufacturers hate trade promotions because of the spike in sales followed by a significant drop-off as dealers work down their stockpiled inventory, throwing off production and labor at the manufacturer. However, in the case of MMC, the sales VP is working actively to tackle this problem and counter the sales slump after the products’ prices have increased. How he does so is a core learning of the case. How?

“Dramatizing the idea [of buying MMC products before the price increase] in terms that his district managers were expected to pick up and use with dealers, Dugener noted that popular blue chip investments on the stock market (half a dozen of which were cited) woudl bring the investor returns of 3 percent to 7 percent.

But, Dugener quickly pointed out, an investment in Malsbary equipment would ensure the dealer a return as high as 54.9 percent - and within thirty to ninety days. Facts, figures, and cases were put forward to illustrate how a dealer could benefit by ‘investing’ in Malsbary models prior to the price increase.”

The logic behind forward buying as an investment is easy to follow here. The dealer simply buys MMC’s products at the current price, and then, when the company raises prices, they can sell at the higher price, earning the cited return. This logic is still sound today, although one thing that makes things a bit more complicated is variable pricing. As price changes gain speed within the distribution channel, the math becomes a bit less reliable. And obviously, competition and demand for the product also matter and could make things dicey.

In MMC’s case, it appeared they were in a strong competitive position with solid demand for their steam cleaners. Still, the dealer’s concerns about ending up with too much inventory needed addressing. Dugener’s strategy was as follows:

“A dealer’s fear of being overloaded was countered by showing him his own sales record and forecast for 1964. He had proved he could sell the units in the past and, according to his forecast, was confident that he could sell them again. This time he would get more help from Malsbary if he stocked up. It would mean each district manager would be free from routine unit-by-unit selling, and could help the dealer sell.”

The Lesson

The last part of the case describes MMC’s and Dugener’s strategy for avoiding the post-price-increase slump resulting from forward buying by the dealers. In a nutshell, the company’s approach was to aggressively help the dealers move their products through collaborating throughout the dealers’ sales process, directed toward their end-customers. MMC’s district managers worked with their dealers to proactively help them sell the machines they’d just purchased throughout the sales process, from generating new leads, to finding new commercial applications for the more expensive products in their line (costing as much as $8,000 in 1963 dollars, approximately $84,000 today) to closing the sales with their customers. As Dugener observed:

“It’s been our experience that a successful manufacturer is one whose salesmen can get the largest amount of the company’s equipment into dealer warehouses. Ours is a known, high-quality, specialty product which provides a high return to dealers. We have found that, if we can get a fairly heavy stock of our basic equipment into a dealer’s hands, he will put his own efforts into obtaining the fastest possible turnover.

Suppose a dealer forecasts that he will sell 12 units in a year. If we can get him to stock and push these 12 now, there’s a good chance he’ll sell them all within six months. That leaves him open for another six models to sell the rest of the year. Also, we’ve found that the dealer, with so many competitive products to sell, will devote as much time to creative selling of our product as our district managers give to him. If our man is available to help the dealer develop and follow through on opportunities, the dealer reciprocates proportionately.”

More than sixty years have passed since this case, but it feels modern with the sense that everything described in it could well have happened last month. The main lesson I took away is that communicating a price increase almost always means selling the price increase and working proactively with those affected by the price increase to alleviate any problems they might face, and also to help them benefit from the opportunities the price increase produces. Like everything else in pricing strategy (and in life), the truth is far more complicated than it appears on the surface.

1. Cowles, C. (2022). Our prices are going up, but we’re in this together. New York Times, August 20. Available online at: https://www.nytimes.com/2022/08/20/style/price-increase-emails-inflation.html

2. Hamilton, K., & Seal, D. (2025). Retailers flex their vocabulary to warn of potential tariff-driven price hikes. Wall Street Journal, May 30. Available online at: https://www.wsj.com/business/retail/retailers-flex-their-vocabulary-to-warn-of-potential-tariff-driven-price-hikes-a5d9748c;

3. Dholakia, U. (2021). If you’re going to raise prices, tell customers why. Harvard Business Review. Available online at: https://hbr.org/2021/06/if-youre-going-to-raise-prices-tell-customers-why; Wingfield, N., & Stelter, B. (2011). How Netflix lost 800,000 members, and good will. New York Times, October 24. Available online at: https://www.nytimes.com/2011/10/25/technology/netflix-lost-800000-members-with-price-rise-and-split-plan.html

4. Battaglio, S. (2024). Cord-cutters are fuming over YouTube TV price hike. But streaming inflation is here to stay. Los Angeles Times, December 14; Dawson, N. (2025). Tesco responds to customer outrage over chocolate price rise. Bristol Live, May 28; Vacchiano, A. (2024). Five Guys’ prices spark outrage after $24 receipt goes viral: ‘Highway robbery.” Fox Business, March 6.

5. Williams, R. (2025). Chanel pulls back on price hikes as sales fall 4%. Business of Fashion, May 20. Available online at: https://www.businessoffashion.com/articles/luxury/chanel-pulls-back-on-price-hikes-as-sales-fall-4/

6. Throughout this piece, I quote extensively from the original piece, adding my commentary as appropriate.

7. Desai, P. S., Koenigsberg, O., & Purohit, D. (2010). Forward buying by retailers. Journal of Marketing Research, 47(1), 90-102.

8. Sigué, S. P. (2008). Consumer and retailer promotions: who is better off?. Journal of Retailing, 84(4), 449-460.