Prices go up, but will sales go up?

A well-known company that we haven’t mentioned on our blog yet is Kimberly Clark and this company is a big player in the household and personal product industry. This company is the producer of brands such as Kleenex, Pull-Ups, Kotex, Scott and Huggies which are well-known products people buy everyday. In addition to producing many well trusted products, Kimberly Clark has the No.1 or No.2 share position in over 80 countries around the world. The brands that Kimberly Clark produces are a very necessary part of life for people all over the world because they are used for health and hygiene. Unfortunately though, the company recently announced that their prices will be increasing in North America which is not something most consumers will be too happy about. The price increases will be focused on child-care and consumer-tissue products and will likely be put into effect in the second and third quarter of 2011. These raises are the result inflation causing commodity prices to increase. The companies raw material and energy costs have gone up which leaves them no choice but to raise the prices of their products, for diapers it will be between a 3 and 7 percent increase and for tissue about 7 percent as well. The company hasn’t been seeing as much profit as it would like so hopefully these raised prices will increase profit and not decrease it. Kimberly Clark has been around for a while and it is known as being a trustworthy and respectable company. The corporate responsibility action plan of this company was recently recognized and the company has won numerous awards regarding it. I don’t think the increase in their product price will have a negative effect on the company because people already known and trust them so they aren't going to turn to a less-known brand, especially in terms of personal products. 

Sources: 

http://online.wsj.com/article/SB10001424052748703818204576206380107721692.html?mod=WSJ_Consumerproducts_leftHeadlines

http://investor.kimberly-clark.com/releasedetail.cfm?ReleaseID=558344