Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: PRODUCT SYSTEM COMPONENT SEGMENT / A PART OF THE MAIN PRODUCT
CHOICE 3 COMPONENT: CHANGE THE BASIS OF CHARGE
| No. | SIC | Year | Notes |
| 1 | 5411 | 2004 | Closer to downtown, HEB's stores face more competition for lower-income customers. There, HEB has found that pricing products by the piece, instead of by the pound, produces better sales from buyers who come in with just $20 in their hands. |
| 2 | 6021 | 1991 | Sanwa Bank offers a no-points home loan. It saves you about 1.5% of purchase price at time of purchase, then raises interest over the life of the loan by .5% (10.5 v. 10). So, on a $250,000 house, the customer saves $3,750 but pays (assuming 20% down, 8% interest, and 30-year term) $890 per year more over the life of the loan–NPV of $11,044. At five years, the customer breaks even. Customers who keep their homes for fewer than five years realize a lower net price and receive higher savings. Customers who do not have the money to pay the points benefit from this (increasing the market for the bank). |
| 3 | 6211 | 2004 | Ameritrade charges a flat $10.99 for online market and limit orders, for an unlimited number of shares. Automated phone trades cost $14.99, and broker-assisted trades cost $24.99. Ameritrade has a maintenance fee of $15 per quarter if you don't trade at least three times per quarter, or if you have less than $2,000 in your account. Scottrade charges a flat $7 per trade for market orders and $11 for limit orders. There are no fees for small or inactive accounts. |
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