# Inflation, the hryvnia and a competitor's cut > Index on your own costs, explain a rise honestly, answer a rival's cut without a price war, and never agree prices with competitors. - Course: [Pricing: Set, Package and Raise Your Prices](https://productovi.com/courses/pricing.md) - Module: How do we change a price? - Lesson 27/32, ~27 min - Source: https://productovi.com/courses/pricing/inflation-hryvnia-competitors ## Costs that move **Alex Tutor:** Back at Klasna, April 2027. Nazar is preparing the price list for the 2027/28 school year, and the costs under it are moving. **Hanna:** Two changes. Tutors asked for an inflation rise, and we'll pay 20 UAH more per lesson from September: English goes from 390 to 410. And video and AI, 30 UAH a lesson, are billed in dollars. **Hanna:** We planned this year at 44.8 UAH per dollar. For next year I plan at 47.0. That's an assumption for the budget, not a forecast of the rate. **Alex Tutor:** First the dollar line. What does 30 UAH a lesson become at 47.0? > **Exercise:** Video and AI cost Klasna about 30 UAH a lesson at the planning rate of 44.8 UAH per dollar. Hanna plans next year at **47.0**. What will they cost per lesson? To two decimals. **Leo:** Simple: prices went up about 10% everywhere, so we add 10% to everything. 620 becomes 682. **Alex Tutor:** Ten percent is your assumption, Leo, and it's about the whole economy. Start from Klasna's own costs. For an English lesson in the 16-pack, what price keeps today's contribution of 184.50 after both changes? **Sofia:** Video and AI become 30 × 47.0 / 44.8 = 31.47. The fee is 2.5% of the price, so I divide by 0.975. $$ P = \frac{CM + T + V}{1 - 0.025} $$ *P: price per lesson that keeps the contribution; CM: today's contribution (184.50); T: new payout (410); V: video + AI at the new rate (31.47).* > **Exercise:** From September the English payout is 410 UAH and video + AI cost 31.47 a lesson. The fee is 2.5% of the price. What price per lesson keeps today's contribution of **184.50 UAH**? To two decimals. **Alex Tutor:** Now Leo's ten percent. What's wrong with it as a cost argument? > **Exercise:** Leo wants +10% on every price because "prices went up about 10% everywhere". Klasna's own costs need 642.02 instead of 620 (+3.55%). What is the main problem with Leo's plan? ## What the rise is for **Alex Tutor:** Costs explain about 22 UAH of a rise, 3.55%. Leo's 682 would be a 10% rise. Nazar's plan is +50 per lesson on every package, so the English 16-pack goes to 670. **Nazar:** And the other 28? Our test this spring says families value the lessons more than 620. I'll show you the data later. **Alex Tutor:** Then say that. If you write "because of inflation" and someone works out that costs moved 3.5%, the whole message loses credibility. Name both reasons honestly: costs and what families get. **Alex Tutor:** One more habit: index once a year, on a published rule and a fixed date. Families can plan around September; a new price every time the hryvnia moves teaches them to stock up and to doubt you. **Alex Tutor:** How often should prices follow the costs? > **Exercise:** The hryvnia moves every month. How should Klasna adjust its consumer prices? **Hanna:** And prices for families in Ukraine stay in hryvnia. As of October 2026 the law requires consumer prices in Ukraine in the national currency, so no dollar price tags to shield us from the rate. **Hanna:** Our EUR prices for families abroad are set in euros and reviewed on the same yearly date. > **Exercise:** Klasna raises the English 16-pack from 620 to 670 UAH; about 22 UAH of that is cost increases. Which reason should the announcement give? > **Exercise:** **True or false:** to protect itself from a weaker hryvnia, Klasna may show its prices to families in Ukraine in US dollars. ## A rival cuts its price **Nazar:** Bad timing: another online school just launched a spring promo, 540 UAH for a one-to-one English lesson. Should we match it? **Alex Tutor:** First see what matching costs. At 540 a lesson leaves 540 × 0.975 − 390 − 30 = 106.50, against 184.50 at 620. That's 42% less on every lesson, including all the families who'd never have left. **Nazar:** Then let's use what we already know. In our spring test new visitors saw 620 or 670, and at 670 they bought almost as often: 5.53% against 5.80%. A 50 UAH gap barely moved them. So my call: we keep our price and run no counter-promo. Losing 78 UAH on every lesson to win a few families who might switch isn't worth it. **Leo:** Or I just call their founder. We've known each other for years. We agree nobody goes below 600, and the problem's gone. **Alex Tutor:** No. That's price fixing. As of October 2026, Ukraine's competition law bans competitors agreeing on prices or splitting customers, with fines of up to 10% of the previous year's revenue, and EU law bans it too. A friendly call or a group chat counts the same as a contract. **Hanna:** And no talk about our future prices with them at all, not even "we're thinking of raising in September". We decide on our own costs and our own customers. > **Exercise:** If Klasna matched the rival's 540 UAH for an English lesson (payout 390, video + AI 30, fee 2.5%), what contribution would one lesson leave? > **Exercise:** A rival school cut its English lesson to 540. Which statements about Klasna's answer are right? Select all that apply. **Alex Tutor:** One last check on Leo's call to the rival's founder. > **Exercise:** **True or false:** if Leo and the rival's founder only agree on a phone call that neither school goes below 600 UAH, with nothing written down, it isn't a price agreement. ## Your turn: an answer for Leo **Leo:** Fine, no call. Then tell me what we do about their 540 and about September. > **Exercise:** Leo asks: "What do we do about their 540, and about September?" Answer in 4–6 sentences: the cost of matching, what Klasna decides and on what data, why there will be no call to the rival, and how to explain September's +50. The facts: a rival online school offers one-to-one English at 540 UAH a lesson; at 540 Klasna's lesson would leave 106.50 of contribution instead of 184.50 at 620; in Klasna's spring test new visitors bought the English 16-pack almost as often at 670 as at 620 (5.53% against 5.80%); about 22 of September's +50 per lesson is higher tutor pay and dollar costs, the rest is value. > **Key ideas** > > - **Index on your own costs**, not on a headline inflation figure. Payout 410 and video + AI at 47.0 (31.47) need 642.02 to keep 184.50 a lesson: +3.55%, not +10%. > - **Name the real reasons** for a rise. Of Klasna's +50, about 22 is costs; the rest must be justified by value, not called inflation. > - **Once a year, on a published rule**; prices to consumers in Ukraine in hryvnia (as of October 2026); EUR prices set in euros. > - **A rival's cut:** price out matching first (540 leaves 106.50, −42.28%), then decide from your own data. Klasna's spring test showed a 50 UAH gap barely moved new families, so it keeps its price. > - **Never agree prices or customers with competitors**, not by call, chat or hint: fines up to 10% of revenue in Ukraine (as of October 2026). **Alex Tutor:** Next is the case: Klasna's September 2027 change, read after the summer, when the first numbers look like a disaster. - Previous lesson: [Raising a price: whom, when, how much](https://productovi.com/courses/pricing/raising-a-price.md) - Next lesson: [Case: the September 2027 price change](https://productovi.com/courses/pricing/september-price-change-case.md) --- Productovi Learning. Free, no sign-up needed to read.