0.76 UK, 0.65 DE
StatBrand Strategy
Pricing power and resistance to price rises correlate strongly and measurably
The link between pricing power and price elasticity is measurable: correlation coefficients of 0.76 in the UK and 0.65 in Germany in the skincare category. Brands with strong pricing power see less volume decline when prices rise.
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 17, p. 47-48, The Effectiveness Equation (2025), Kantar Worldpanel/GfK, 10-15 brands per market in skincare, 2022-2024
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PrincipleMarketing measures itself on only one side of the profit equationStatMost organisations have no agreed definition of what marketing effectiveness meansStatBrands with pricing power command roughly twice the price of brands without itStatPricing power comes from meaningful difference, not from salienceCaseA UK skincare brand turned a 2% revenue increase into 7% by lowering its price elasticity firstPrinciplePromotion-heavy communication raises price sensitivity; balanced brand building lowers itStatHalf of advertising's sales effect arrives after the fourth monthStatMedia returns peak with roughly half to sixty per cent of the budget in brand buildingStatRaising brand awareness lifts short-term sales as well as long-term onesWarningWinning back share costs nearly twice what cutting the budget savedWarningEvery dark quarter costs future revenue that takes years to rebuildWarningShifting a shrinking budget into performance can destroy the returns performance depends on