Assalamualaikum and good day everyone,

Today, let’s talk about something very important in the business world — price changes. Companies don’t always keep prices the same. Sometimes, they need to reduce (cut) or increase prices. Let’s see why this happens and what impact it has.

🔻 5.2.1 – Price Cuts

Businesses cut prices when:

• They want to increase sales quickly.

• They want to clear old stock.

• They need to match or beat their competitors.

Example in Malaysia:
Giant or Mydin sometimes lower the prices of basic goods like cooking oil or rice during festive seasons like Hari Raya. This attracts more customers and clears stock fast.

Impact to Customers:
Customers are happy. They can buy more for less.

Impact to Company:
The company might make less profit per item, but higher sales volume can still bring in good revenue. However, too many price cuts can make customers expect low prices all the time.

🔺 5.2.2 – Price Increases

Companies raise prices when:

• Costs of raw materials or transport go up.

• They want to position their product as premium.

• There’s high demand and limited supply.

Example in Malaysia:
Petrol price increases due to global oil price hikes. Also, when KFC increases prices slightly due to higher cost of chicken or packaging.

Impact to Customers:
Customers may feel unhappy or buy less, especially if prices go too high.

Impact to Company:
The company might gain higher profits per unit. But if the price is too high, it can lose customers to competitors.

📌 Final Thoughts

In business, changing prices is a strategy. But every change must be made carefully — because it affects how customers feel, and whether the company can still make a profit and stay competitive.

Remember: Don’t just look at the price — understand the reason behind it!