Warren Buffett once said, “You can determine the strength of a business over time by the amount of agony they go through in raising prices.”4 Buffett and his partner, Charlie Munger, realized that as customers form routines around a product, they come to depend upon it and become less sensitive to price. The duo have pointed to consumer psychology as the rationale behind their famed investments in companies like See’s Candies and Coca-Cola.5 Buffett and Munger understand that habits give companies greater flexibility to increase prices.
