Pricing During a Pandemic
The case "Pricing during a Pandemic" looks at food pricing during a natural disaster, in this instance a pandemic, which caused widespread disruptions in supply chains. Using data from India, a country whose food supply chains are particularly vulnerable to food supply disruptions due to limited warehousing facilities, the case examines the evolution of vegetable prices before and after the COVID-19-induced economic lockdown in India. It evaluates the price movement across three platforms: wholesale, offline retail and online retail. The data shows a sharp spike in food prices post-lockdown, raising concerns about price gouging by retailers. The case allows one to discuss what constitutes sufficient evidence of price gouging and the role of public policy in identifying such behavior. It also showcases the pricing strategies of various market players and can be used to discuss business ethics.
The case can be used to discuss the objective function of various market participants and their goals: 1. Consumers: Panic buying, price sensitivity 2. Firms: Pricing behavior a. Long-term vs. short-term pricing objectives b. Reputation concerns c. Divergence across retail platforms (offline vs. online) 3. Government: Public policy a. Price monitoring b. Consumer grievance portal c. Do price controls work? d. Difficulty in gauging price gouging