A UK skincare brand turned a 2% revenue increase into 7% by lowering its price elasticity first

CaseBrand Strategy

A UK skincare brand raised prices by 14%. Modelling suggested that without brand investment this would have cost 10% of sales volume. Because the brand had reduced its price elasticity from -0.7 to -0.6, volume fell only 7%, turning what would have been a 2% revenue increase into a 7% one. Analytics attributed 76% of that improvement to increased pricing power.

Source

The Effectiveness Equation - Google Market Insights EMEA, with Kantar, Nielsen, Ekimetrics, Ipsos MMA, the Behavioural Architects and WARC (2025)

Michal Protasiuk, Ahmet Bas, Jonas Christensen, Vanessa Bruns, Emily Allen and Jonny Protheroe (Google Market Insights, EMEA)

Figure 18, p. 49-50, The Effectiveness Equation (2025), Kantar Worldpanel/GfK, modelled from real sales data Jan 2021-July 2024

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PrincipleMarketing measures itself on only one side of the profit equation StatMost organisations have no agreed definition of what marketing effectiveness means StatBrands with pricing power command roughly twice the price of brands without it StatPricing power comes from meaningful difference, not from salience PrinciplePromotion-heavy communication raises price sensitivity; balanced brand building lowers it StatPricing power and resistance to price rises correlate strongly and measurably StatHalf of advertising's sales effect arrives after the fourth month StatMedia returns peak with roughly half to sixty per cent of the budget in brand building StatRaising brand awareness lifts short-term sales as well as long-term ones WarningWinning back share costs nearly twice what cutting the budget saved WarningEvery dark quarter costs future revenue that takes years to rebuild WarningShifting a shrinking budget into performance can destroy the returns performance depends on