As many companies look for ways to cut costs, some businesses are raising the prices of their products and still retaining customers. Marketing MBA seekers may be interested to see how the J.M. Smucker Company has increased its earnings through higher costs.
Smucker, a manufacturer or food products such as fruit spreads, Jif peanut butter and Folgers coffee, reported a net income of $132 million in its third quarter. Revenue increased by 9 percent to $1.31 billion.
About 4 percent of Smucker's higher earnings were the result of new coffee prices, according to company officials. The higher costs applied to the Folgers and Dunkin' Donuts brands.
The 10 percent price increase on these brands was due to higher costs for raw materials such as coffee beans, milk and sugar.
Despite these developments, and the fact that company officials have said they may increase more prices, Smucker sold more of its products on the whole, The Associated Press reported.
"These strong results reflect our disciplined approach to managing our business," said Richard Smucker, executive chairman and co-chief executive officer.