Strategic Movements September 2021


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

Published September 21, 2021

Campbell Soup Getting the Message

In early September, Campbell Soup Co. (CPB) announced that further price increases are expected to counter the rising costs of steel in cans and other materials. Mark Clouse, CEO, stated: “I think we’ve got more room. However, I do think there are still some boundaries.”  Stock price edged up from $42/share to $44/share in the three weeks following. 2020 Revenue of $8.6 billion and P/E of 13.9.

Strategic Pricing Movements September 2021: TSMC

TSMC to Raise Chip Prices

Taiwan Semiconductor Manufacturing Co. (TSMC), the globe’s largest chip foundry, announced in late August plans to increase prices ahead of fall negotiations. Its most advanced chips, such as those used by Apple, are suspected to increase by 10%. Its less advanced chips, such as those used in automobiles, are estimated to rise by 20%. The price rise is primarily a reaction to chip shortages following the pandemic and sets TSMC on a path to have cash in their budget for a $100 billion facility expansion (yes, that is billion with a B). Expect Intel to be closely watching.

Strategic Pricing Movements September 2021: MCR Hotels

MCR Hotels Tests A la Carte Pricing

MCR Hotels, the fourth largest hotelier by room count, is charging for amenities that once were free.  Early check-in at about $20. Further surcharges for late checkouts, pool use at busy times, gym use, and even breakfast. A shift to charging for services but having a lower room rate would likely improve rankings on search sites like Expedia, but will they also create customer strife as business customers have to justify every expense. I don’t expect Marriot or Hilton to pursue this path quickly if their client base and purchase path differs.

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.