Of course, implementing price changes of 5% or more perhaps seems drastic, but levels have been chosen just to demonstrate the dynamics in this. The key learning from this is that you need to factor in the margin of your product / service before starting to model on price changes and that you need to carefully consider the possible impact of demand from your price changes. In reality this means that you need to have a clear view on the demand curve for your specific product/service, otherwise estimating impact of the the price change will become a guesswork.
Make sure that you have modelled the price change thoroughly, carefully considering impact on demand in order to make sure you reach the effect you are looking for. Remember that changing price is a very powerful tool with direct impact on your business, and consequently it is a tool that you carefully need to model and analyse before you leverage it. Also, remember that apart from possible impact on demand, changes in your pricing might come with other impact as well, just as an example see below for the most obvious ones:
Changing your price might change your customers perception of your brand. You need to ask yourself if you can fit the new price in to your existing brand or whether it actually will lead to a re-positioning in the market.
Changing your price might change dynamics in your channel, a retailer might chose to stop ranging your product after a price decrease since that part of the portfolio is already filled with other brands; or the other way around of course.
C. Customer expectations
Price is typically having a significant impact on the customers expectations. This means that if you for instance manage to increase the price of your product your customers might as a consequence also expect a better quality of your product and/or better customer service and support.