How to Avoid a Price Increase [Archive.org URL]

When product companies see the cost of materials rise, the result for consumers is often a price increase (gasoline) or, less often, a smaller amount of product at the same price (potato chips).

Which option is more likely to turn off your customers? For many products, it’s better to reduce quantity than raise prices, conclude Harvard Business School marketing professor John Gourville and University of Texas professor Jonathan Koehler. Gourville discusses the price-versus-quantity dilemma in this e-mail interview.

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