Rick Wartzman
speaker
65 appearances
1 recordings
1 series
first heard Jun 2022
last heard Jun 2022
Rick Wartzman’s voice in public audio — every appearance, attributed to the second.
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Appearances
WSJ Your Money Briefing · Why Consumers Are Willing to Pay More for Some Brands · 10 Jun 2022
podcast
That's where the airlines fall.
Now, we know that airlines have been raising prices like crazy, and they have been able to pass them along.
There's a lot of...
pent up demand post COVID, but as people start to travel again and airlines have been able to raise prices and flying right now is pretty expensive.
They're also eating a lot of higher fuel costs and so on, all of which is being passed on.
So consumers are paying for that.
What our data would tell us is that they need to be careful, right?
For now, they may be able to take advantage of this post pandemic, if you will, demand surge,
But this is an industry with this negative correlation between net profit margin and customer satisfaction.
Unless they deliver high customer satisfaction, and right now there's been a lot of complaints at the same time prices are going up.
Long lines at airports, long lines, I don't know if you've called an airline recently to try and change a flight or deal with a ticket.
It's, you know, not very smooth.
And so, you know, they need to be wary because there could be a backlash coming.
You know, I think the lesson is, look, companies in an inflationary environment can probably get away with a lot of price increases right now, but they need to be wary.
Again, in certain industries in particular, there's a chance of alienating consumers over time.
And so pricing is a tricky dance, right?
It's partly how much market share do you have?
How much pricing power do you have as a result of that?
How are your competitors responding?
I do think that in an environment where either it's just hard to find what you're looking for, as in the case of baby formula, there's just a shortage, or in a really high inflationary environment, if you do see a cheaper alternative, and particularly if your wallet is tight and you're trying to make ends meet, it is a time you would forego brand loyalty that you might have had.
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