We market coconut oil across the Dakshina Kannada district for edible use. To prevent unhealthy competition that erodes everyone’s profits, an association has been formed among all oil millers. A minimum price is set weekly, and all oil millers are expected to follow it while setting the selling price of their respective brands.

Cocoguru began with a price premium of ₹1 when the association was formed two months ago. We are now increasing the premium by another rupee, setting it at ₹2 on a product valued at approximately ₹150.

Here are our thoughts behind this price increase:

• Increase Brand Value – Brand value is measured as the price premium multiplied by the increase in sales due to the brand name compared to an unbranded alternative. We invest in enhancing our brand value and later aim to monetise it.
• Signal of Quality – It is otherwise difficult to communicate the value of our product in comparison to competitors. One of the easiest and most reliable ways is through pricing. Just as we assume a higher-priced shirt is better when two look similar, or food in a star hotel is superior because of the higher bill, price becomes a strong indicator of quality.
• Reason for Purchase – People should choose our product because they truly want it—not simply because it’s available at a lower price.
• Increase Responsibility – With a price increase comes the responsibility to maintain and grow sales by improving quality, service, marketing, consistency, and accountability. This, in turn, strengthens the brand.
• Satisfaction – All stakeholders—employees, suppliers, salesforce, distributors, retailers, and consumers—experience greater pride and satisfaction in being associated with a premium brand.
• Insulation from Competitor Moves – Lower-priced brands are always vulnerable to new entrants and aggressive pricing strategies. In contrast, premium brands are more resilient. Competitors must work hard to build their brand to attract our customers.
• Prevent Bargaining – When price is the main selling point, customers tend to negotiate. Sales happen only when we concede. If we yield to those who bargain, even those who don’t will eventually start. In a routine FMCG transaction, bargaining with the same customer every week is not a sustainable practice.
• Futile Price Wars – Competing on price is not sustainable. A temporary gain from a lower price is quickly countered by competitors lowering theirs even further. This leads to price wars that leave all parties worse off.

Going forward, we aim to widen the price gap and eventually ensure Cocoguru is not subjected to direct price comparison with other brands. Every aspect of our business is undergoing continuous improvement, and pricing will evolve accordingly.