Strategic Movements July 2021


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published July 20, 2021

P&G Selectively to Raises Prices by 4% in September

Procter and Gamble Co. (PG) announced plans to adjust prices in September 2021 by 4% overall.  In a targeted approach, prices on Beauty will increase by 7% overall, Grooming by 4%, Healthcare by 3%, and Fabric and Home by 7%, while Baby, Feminine, and Family Care will be lowered by 1%.  Notice both the early announcement, which will test the appetite of competitors for a price increase, and the selective targeting in their approach as opposed to an across the board approach. Shares rose from $136.61 to $137.75 on the day of the announcement. 2020 Revenue of $71.0 billion and P/E of 20.6.

P&G and General Mills to increase prices to offset rising costs

General Mills to Raise Prices

General Mills Inc. (GIS), facing a 7% cost increase, plans to offset half that loss in profits by reduced discounts and price increases. Shares rose 1.5% on the day of the announcement. 2020 Revenue of $4.2 billion and P/E of 15.8.

How to price consumer space flights

Price a Space Flight

What price for a spaceflight? This once theoretical question has become a real necessity for both space operators and space investors. Branson’s Virgin Galactic (SPCE), Bezo’s Blue Origin, and Musk’s SpaceX plan to profit by charging customers for a flight to outer space.  Virgin Galactic is planning for 400 flights a year by 2022 with multiple spacecraft. While Branson’s recent flight had over 20 bids in excess of $4.8 million, 800 bookings for the future averaged only $250,000 per consumer-astronaut. UBS estimates ticket prices will rise to $300,000 to $400,000 while simultaneously mentioning that future prices may be more accessible when costs decrease. Current market cap of $7.3 billion on 2020 revenue of $238 thousand and losses of $645 million yielding a Price to Revenue ratio of 30,700 to 1. Clearly valued as a growth stock.

About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.