Founders often mistakenly start with low-margin, mass-market products (the "save the whales" syndrome), which makes the business look damaged. A better strategy is to start at the high end with less price-sensitive customers. This builds a premium brand and generates the capital required to address the broader market later.

For luxury brands, raising prices is a strategic tool to enhance brand perception. Unlike mass-market goods where high prices deter buyers, in luxury, price hikes increase desirability and signal exclusivity. This reinforces the brand's elite status and makes it more coveted.

The success of premium grocer Meadow Lane, selling $17 nuggets while the city mayor pushes for affordable stores, illustrates a K-shaped economy. One consumer segment drives demand for premium brands, while another faces increasing price pressures.

Focus on markets where customers value their time more than money and are less price-sensitive. This strategy accelerates profitability by targeting buyers who can easily afford your solution to their high-value problems, as they will part with their money more easily.

For the first time, Delta's premium cabin sales, from just 30% of its seats, have surpassed coach sales. This shift provides tangible evidence of a "K-shaped" economic recovery, where a growing wealthy consumer base spends more on luxury while the mass market cuts back, forcing brands to cater to the profitable high end.

When a new KFC premium product wasn't selling, they doubled the price instead of discounting it. This aligned the price with consumer expectations for a premium item, signaling quality and causing sales to soar. Low prices can imply low quality for high-end goods.

After a 38% price hike led to four years of declining sales, PepsiCo is cutting prices. Consumers didn't stop snacking; they switched to cheaper store brands from retailers like Walmart and Costco. This shows that even for iconic brands, there is a ceiling to pricing power before customers abandon them for better value.

Facing an 80% stock decline, premium salad chain Sweetgreen introduced a $10 value meal. This move is a significant strategic pivot, indicating that even brands catering to affluent customers must now compete on price. It suggests a broader trend of consumers cutting back on discretionary spending, even for perceived healthy options.

AI analyzes sales, operations, and media data to identify price elasticity across product bands. Brands can then increase prices on premium items where consumers are less sensitive, while keeping prices flat on essentials, thus protecting margins without alienating the entire customer base.