When Higher Consumer Demand Doesn’t Lead to a Price Increase

The high willingness-to-pay of customers often comes with strong expectations of fairness and trustworthiness.

“We’re making 20 times the amount of sanitizer in July as we did last year. It just gives you the sense of the demand that there is.” - Laxman Narasimhan, CEO of Reckitt Benckiser, Maker of Lysol.

When a business sets prices using the Value Pricing Framework, it uses four inputs into its pricing decision: costs, customer value, reference prices, and valu…