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Abstract
Discount retailer Dollar Bill's has been struggling to maintain its margins over the past two years because of inflationary pressures, delays on imported goods, and decreased foot traffic. Now the board has asked CEO William Fisher Jr to develop a strategy for raising prices. William worries that raising prices will hurt the company's reputation and alienate customers, but he recognizes that something has to change. Should Dollar Bill's maintain the dollar price point by reducing product quantity, such as repackaging five-packs of chewing gum into four-packs for the same price? Or should it abandon the dollar price point and begin offering an array of more-expensive goods? This fictional case study features expert commentary by Greg Besner, the CEO of Sunflow, and Barrie Carmel, the vice president of pricing at Michaels Stores. This HBR Case Study includes both the case and the commentary. For teaching purposes, this reprint is also available in two other versions: a case study-only version, and a commentary-only version.
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Abstract
Discount retailer Dollar Bill's has been struggling to maintain its margins over the past two years because of inflationary pressures, delays on imported goods, and decreased foot traffic. Now the board has asked CEO William Fisher Jr to develop a strategy for raising prices. William worries that raising prices will hurt the company's reputation and alienate customers, but he recognizes that something has to change. Should Dollar Bill's maintain the dollar price point by reducing product quantity, such as repackaging five-packs of chewing gum into four-packs for the same price? Or should it abandon the dollar price point and begin offering an array of more-expensive goods? This fictional case study features expert commentary by Greg Besner, the CEO of Sunflow, and Barrie Carmel, the vice president of pricing at Michaels Stores. This HBR Case Study includes both the case and the commentary. For teaching purposes, this reprint is also available in two other versions: a case study-only version, and a commentary-only version.
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