Pricing Power

Pricing Power refers to the ability of a company to raise prices without losing customers or significantly affecting demand for its products or services. This power is often indicative of strong brand loyalty, a unique product offering, or a dominant market position.

Examples:

• Luxury Brands: Companies like Rolex or Louis Vuitton can increase prices due to their brand prestige and customer loyalty.
• Pharmaceuticals: A company holding a patent for a life-saving drug can often raise prices, as there may be no substitutes available.

Cases:

• Apple Inc.: Known for its strong brand and innovative products, Apple has demonstrated pricing power by consistently raising prices for new iPhone models without a significant drop in sales.
• Coca-Cola: As a leading beverage company, Coca-Cola can increase prices while maintaining customer demand, supported by brand loyalty and market dominance.