When The Prices are High, How Can Brands Maintain Their Values?

This shift in strategy did not happen without reason. Throughout the first half of 2026, Indonesia's economy displayed two conditions that appeared contradictory, yet were actually unfolding at the same time.

On one hand, Bank Indonesia's Consumer Confidence Index (CCI) still stood at 117.8 in June 2026 — down from 120.9 the previous month, but still within optimistic territory, as any reading above 100 indicates (Bank Indonesia, 2026a). Household consumption in the first quarter of 2026 even grew 5.52% year-on-year, contributing more than half of national Gross Domestic Product (Kompas.com, 2026a). This shows that consumption activity was still growing in early 2026, although that growth was also shaped by seasonal factors such as the Eid al-Fitr holiday and various government stimulus measures.

Yet this optimism doesn't mean economic pressure has disappeared. Even as people continue to spend, the cost of living and the cost of doing business keep climbing. Annual inflation reached 3.34% in June 2026, with food, beverages, and tobacco as the biggest contributors (ANTARA News, 2026). The rupiah briefly hit its weakest level on record, touching IDR 18,171 per US dollar in early June 2026 (JISDOR BI, 2026). More worrying still for businesses, Bank Indonesia's June 2026 consumer survey found that the share of household income allocated to consumption rose compared to the previous month, while the share set aside for savings declined (Kompas.com, 2026b). This suggests that even though the public remains optimistic about the economy, their financial headroom is narrowing, making purchasing decisions increasingly calculated.

On the producer side, the pressure is felt even more acutely. Indonesia's S&P Global Manufacturing PMI fell to 46.9 in June 2026, marking a sharp contraction (S&P Global, 2026). For brands, the pressure is coming from multiple directions at once. A weaker rupiah has driven up the cost of imported raw materials, while rising input costs have pushed producers to raise selling prices at the fastest pace in nearly 13 years. Under these conditions, fewer and fewer companies are able to keep absorbing rising costs without adjusting their product prices.

In other words, brands now find themselves squeezed between two pressures at once. On one side, production costs keep rising, making price adjustments harder to avoid. On the other, consumers are still willing to spend, but have become far more selective in judging whether a product is truly worth the price being asked.

In a situation like this, the question is no longer whether prices are allowed to rise, but how brands communicate the value behind that increase so it still feels fair, reasonable, and worth paying for.

Interestingly, the size of a price increase isn't always the main reason consumers feel let down. In many cases, what matters more is how they interpret that increase. This concept is known as price fairness — the perception that the price a brand sets still feels reasonable, fair, and proportionate to the value received (Xia, Monroe, & Cox, 2004).

Imagine two products that both raise their prices by 10 percent. Product A simply changes the number on the price tag without any explanation. Product B, meanwhile, explains that the price adjustment reflects improved raw material quality, updated packaging, or higher logistics costs caused by the weaker rupiah. The size of the increase is identical, but consumer response isn't necessarily the same. This difference in response shows that consumers don't just evaluate the price itself — they also evaluate the reasoning behind it. When the rationale for a price increase is communicated clearly, the new price tends to be perceived more easily as reasonable.

This phenomenon is becoming increasingly relevant to the current situation. Indonesia's June 2026 Manufacturing PMI data shows that producers raised selling prices at the fastest pace in nearly 13 years (S&P Global, 2026). Amid mounting cost pressure, price adjustments may be hard to avoid. But the challenge for brands isn't only deciding when to raise prices — it's also explaining the reasoning behind that decision in a way consumers can still accept. Ultimately, what needs to be communicated isn't just why the price went up, but the value consumers continue to receive after the price changes.

When the economy is under pressure, many brands assume the safest strategy is to offer the lowest price possible. The logic seems simple: the more price-sensitive consumers become, the more likely they are to choose the cheapest product.

However, various studies show that consumer behavior isn't actually that simple. Amid economic pressure, consumers do become more selective — but that doesn't mean they always opt for the lowest-priced option.

Research by Worldpanel by Numerator, formerly Kantar Worldpanel (2025), on Indonesia's FMCG industry found that responses to economic pressure diverge by income class. Higher-income groups tend to switch to larger pack sizes to get a lower price per unit, while middle- and lower-income groups more often switch to cheaper products within the same category. This finding shows that consumers are seeking the best value for their own financial situation, just through different means depending on the segment.

The Inventure–Alvara survey (2025) found a different pattern among urban consumers. Of 589 respondents across seven major cities, 70 percent preferred smaller pack sizes bought more frequently, and 72 percent preferred shopping at minimarkets with smaller basket sizes per transaction. The reasoning had more to do with managing daily cash flow than simply seeking a lower price. The difference in scope between the two studies should be read with care, since Worldpanel tracks a national household panel for in-home consumption, while Inventure–Alvara surveyed urban consumers specifically. Even so, both point to the same conclusion: pack-size and pricing strategies cannot be applied uniformly across every market segment.

A similar pattern appears in a NielsenIQ (2025) report covering the Asia Pacific region. Although consumers have adapted to price increases and continue to spend, they have become far more deliberate in managing their expenses. Priority goes to what's considered essential, while other purchases get weighed more carefully. Even consumers in relatively comfortable financial positions have started managing their budgets more cautiously.

This behavioral shift means competition is no longer determined solely by who offers the lowest price. Deloitte (2026), drawing on a global survey of 300 senior consumer goods executives together with cross-market consumer data, found that the brands most likely to win consumers over are MVP brands (more-value-for-the-price) — brands that make customers feel the value they receive outweighs the price they pay.

Interestingly, this concept isn't limited to cheap products. Premium brands can also become MVP brands, as long as consumers feel that the quality, experience, or benefits they receive are worth the price they pay. Deloitte (2026) found that such brands enjoy higher purchase intent and are more successful at capturing a share of household spending. Unfortunately, only about a third of brands are considered to have successfully created that perception.

These findings point to one practical conclusion. The challenge for brands today lies in making sure consumers understand and feel the value already on offer, rather than creating entirely new value from scratch. As the room to compete on low prices keeps shrinking, pricing strategy can no longer be separated from communication strategy. This is where communication plays its part — helping consumers understand why a product still deserves to be chosen, even as its price changes.

For years, price strategy has been one of the main growth engines for many brands. Discounts, cashback, free shipping, and aggressive promotions have all been used to attract new customers while driving repeat purchases. However, various indicators throughout 2025–2026 show that the room to sustain this strategy is shrinking.

Input cost pressure has reached one of its highest levels since the survey began in 2011 (S&P Global, 2026), while a weaker rupiah has pushed import costs up as well. Together, these two forces are squeezing margins and making strategies built around low prices and aggressive promotions increasingly hard to sustain in the long run. This shift is also reflected in Deloitte's (2025) findings based on a survey of US consumers, which show that consumer perceptions of price and value have changed since the period of high inflation and have yet to return to where they were before.

In other words, the challenge for brands today is no longer just about offering the lowest price. The question has shifted to how to make consumers feel that the price they pay is still worth the value they receive.

This shift shows that price strategy can no longer stand on its own. As the room to keep competing on low prices narrows, a brand's ability to build a perception of value becomes increasingly important. In other words, the focus of competition is shifting from price-led marketing toward value-led marketing.

Deloitte's (2026) findings on MVP brands reinforce this shift. The brands that succeed most in winning consumers over aren't always the ones offering the lowest prices, but those able to make consumers feel that the value they receive matches the price they pay.

If consumers are now more selective in judging whether a product is worth buying, brands face two tasks at once: setting the price and helping consumers understand the value behind it. Below are several communication approaches that can be used to build that perception.

1. Transparency

Help consumers understand the reasoning behind a price change. When a price adjustment truly can't be avoided, brands need to explain the cause openly — for instance, rising raw material costs, logistics expenses, or a weaker exchange rate. This kind of transparency helps consumers see that a price change isn't just a one-sided decision, but a response to real business conditions.

2. Value Communication

Don't just announce the new price — show what remains, or even grows, in value. That value can take the form of product quality, after-sales service, warranties, customer experience, or the innovation on offer. The more clearly consumers feel the benefit, the more likely they are to accept the new price as fair. Deloitte's (2026) findings on MVP brands show that brands able to communicate value consistently have a greater chance of winning purchase intent.

3. Price Anchoring

Give consumers a point of comparison so the price feels more reasonable. One way to do this is by offering several product or package tiers — Basic, Plus, and Premium, for example. Having these options helps consumers judge price in relative rather than absolute terms. This strategy becomes even more relevant as consumers increasingly compare alternatives before making a purchase decision.

4. Offer Flexibility in Size and Pricing Options

As consumers become more careful about managing their spending, offering more flexible pricing options can be a more relevant strategy than simply offering discounts. Brands can therefore consider a more flexible pricing architecture through varied pack sizes, refill products, tiered pricing, or installment payment schemes, where appropriate for the category. This strategy allows consumers to keep accessing the product within their means, without having to sacrifice their sense of the value received.

Inventure–Alvara's (2025) findings show that many Indonesian consumers now prefer smaller but more frequent transactions. For brands, this suggests that flexibility of choice can be a form of value that matters just as much as the price itself.

5. Personalization

Not all consumers view price the same way. Kantar Worldpanel's (2025) findings show that some consumers switch to cheaper products, while others buy larger pack sizes to get a lower price per unit. Meanwhile, the Inventure–Alvara (2025) survey found that many consumers actually prefer smaller pack sizes to keep their spending flexible. This difference shows that responses to economic pressure are not uniform. It follows that both price and value communication strategies need to be tailored to the characteristics of each customer segment. A message that works well for efficiency-oriented consumers won't necessarily resonate with consumers who prioritize flexibility or experience instead.

6. Uphold the Value That Was Promised

When a price adjustment can't be avoided, brand communication shouldn't focus on scrambling to find new value that consumers may not actually feel. What matters more is reassuring customers that the value they've always received is still being maintained. For example, a brand can explain that it has chosen to keep raw material quality, after-sales service, or production standards intact despite rising operational costs. This helps consumers understand that the price increase is being used to protect quality, not simply to boost profit.

7. Make Use of Macro Indicators

Use macro indicators as part of the decision-making process. Trends in inflation, the rupiah exchange rate, the Manufacturing PMI, and the Consumer Confidence Index can all serve as early signals of shifting costs and market behavior. Regularly monitoring these indicators gives marketing and pricing teams room to design communication strategies before cost pressure is fully felt by consumers.

Amid economic pressure from inflation, a weaker rupiah, and rising production costs, price strategy can no longer be treated as a purely financial decision. Price adjustments are also part of communication strategy, since they shape how consumers view a brand.

With consumers becoming more selective and the room to keep competing on low prices shrinking, a brand's ability to communicate value becomes the deciding factor in whether a price adjustment is accepted or rejected. In the end, what consumers judge isn't simply the number on the price tag, but whether the value they receive still feels worth the price they pay.

The findings throughout this article show that Indonesian consumers aren't pulling back from shopping altogether. Instead, they're becoming more selective, more conscious of the value they receive, and more demanding of a reason behind every rupiah they spend. Because of this, brands that can explain price adjustments honestly, communicate value clearly, and maintain consistent quality will have a greater chance of holding on to customer trust.

In the end, price is more than just a number. Price is a message about the value a brand offers. When the price has to change, that message has to change with it. Because amid increasingly selective consumers, it won't be the cheapest price that wins the market — it will be the brand that best makes every rupiah feel worth spending.

References

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