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Testing pricing power: a 10 percent price rise

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Illustrative numbers, fictional companies. Two juice makers in Saudi Arabia each spend SAR 2.00 to make and deliver a bottle. The branded one sells at SAR 3.20 and spends SAR 0.30 a bottle on marketing. The unbranded one sells at SAR 2.50 with no marketing. Both raise prices by 10 percent. The branded maker loses 4 percent of its volume; the unbranded maker loses 40 percent. What happens to profit per 100 bottles they sold before?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Profit = bottles sold x (price minus cost per bottle)
- Margin per bottle before and after the price rise
- Volume after the price rise

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Branded margin today
What a strong candidate does: SAR 3.20 minus SAR 2.00 of product minus SAR 0.30 of marketing.
Branded margin (SAR per bottle): 3.2 - 2 - 0.3 = 0.9
Step 2: Unbranded margin today
What a strong candidate does: SAR 2.50 minus SAR 2.00.
Unbranded margin (SAR per bottle): 2.5 - 2 = 0.5
Step 3: Branded after the rise
What a strong candidate does: Price SAR 3.52, so a margin of SAR 1.22, on 96 bottles instead of 100.
Branded profit per 100 bottles before (SAR): 96 × (3.2 × 1.1 - 2 - 0.3) = 117
Step 4: Unbranded after the rise
What a strong candidate does: Price SAR 2.75, a margin of SAR 0.75, on 60 bottles.
Unbranded profit per 100 bottles before (SAR): 60 × (2.5 × 1.1 - 2) = 45
Step 5: Branded profit change
What a strong candidate does: From SAR 90 to SAR 117.12.
Branded profit change (percent): (117.12 - 90) ÷ 90 × 100 = 30.13
Step 6: Unbranded profit change
What a strong candidate does: From SAR 50 to SAR 45.
Unbranded profit change (percent): (45 - 50) ÷ 50 × 100 = -10

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The same 10 percent price rise lifts the branded maker's profit by about 30 percent and cuts the unbranded maker's profit by 10 percent. That difference is pricing power, and it is what the brand's SAR 0.30 a bottle of marketing buys. The unbranded maker has no pricing power: its buyers move to the next cheapest juice. So in a case, test a brand with one question: what happens to volume when the price goes up?

Risks a strong answer names: Volume responses are estimates; test them with a small trial in a few stores first; Repeated price rises can use up goodwill that took years to build.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.