Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: TARGETED COMPETITOR SEGMENT / PRICE LEADER PRICE AGAINST STANDARD LEADER
CHOICE 3 COMPONENT: CHANGE THE LIST PRICE
| No. | SIC | Year | Notes |
| 1 | 2032 | 1993 | Heinz and Ralston Purina's Beech-Nut unit were hurting Gerber with big discounts. While Beech-Nut cut prices up to 50% last fall, Gerber announced a 5.5% price increase. Gerber lost 2.6 market share points (to 70%) to discounters who priced products with discounts up to 50%. Gerber sales declined 3-4%, exacerbated by low U.S. birth rate. Price parity now returning. Gerber more international than competitors. |
| 2 | 2751 | 1996 | Quad continues to invest aggressively and then wins volume on price. Quad offered Chicago Tribune a savings of $3 million on its retail inserts. Quad had a 96 inch press compared to the 70 inch press run by RRD. In response, RRD cut price by $2.5 million, keeping .5 million premium, and was able to keep the business. Then Quad went to other major customers, including Lands End, Spiegel and Modern Maturity. This gave RRD the reputation that they were hurting their customers by keeping prices high. In each case, RRD responded by reducing prices and keeping the customers, but at lower margins. |
| 3 | 4512 | 2001 | AirTran Airways Inc., angling to keep its hold on budget-conscious travelers amid summer fare sales by other major carriers, unveiled its own significantly lower fares on travel between Atlanta and major cities. AirTran's move appears to be a counter-attack against big-carrier competitiors such as Atlanta-based Delta Air Lines. Late last week, Delta took aim at AirTran with lower fares on business travel between Atlanta and other cities. |
| 4 | 4513 | 1992 | How much cheaper were you on average for those guys? Say 10% to 15%. And that was a relatively easy sale to make. You couldn’t always do it, some customers are going to stay with Federal even at a 15%, or even a 20% advantage over Federal. It wasn’t a slam dunk, but yet it was a sale that was certainly a relatively easy one to make. And helped us take business from them, and build our own business at the same time. |
| 5 | 4700 | 2003 | The Web may heighten competition in other ways. Smaller hotels in the same city may steal business from big convention hotels by offering cheaper online room rates to coincide with a rival's event. |
| 6 | 4813 | 1997 | MCI and Sprint offer greater price discounts, relative to AT&T, for long distance service in the small business market than they do for heavier users. Price is a less effective tool for capturing large business customers, since their service tariffs run hundreds of pages and are hard to compare. |
| 7 | 5300 | 2003 | Wal-Mart Stores Inc. will launch an online music store as soon as next week, with prices that are expected to be lower than competitors'. Walmart.com, the retailer's Internet unit, based in Brisbane, Calif., is teaming with Geneva Media, which in January purchased Liquid Audio's digital-music fulfillment business. Walmart.com's music store will have about 200,000 song titles available for downloading, and they are expected to cost less than the customary 99 cents a song charged by competitors such as Apple Computer Inc.'s iTunes Music Store. |
| 8 | 5731 | 1988 | Today, Tandy is able to undercut IBM's PC prices by 20-30%. |
| 9 | 5735 | 2004 | Companies are experimenting with ways of distributing and selling music that, over time, are headed for the mainstream. Right now, the pricing at the nearly dozen major services, from Apple to Dell, is identical at 99 cents a song and $9.99 an album. But Wal-Mart is testing 88 cent downloads. |
| 10 | 5735 | 2004 | As part of a mounting campaign against market leader Apple Computer, rival RealNetworks is slashing the cost of downloading music. It will drop prices to 49 cents a song and $4.99 an album. The move is a surefire money-loser for RealNetworks in the near term because it will be charging consumers substantially less than it pays recording companies for the music. But RealNetworks is using the sale to highlight its broader effort to unseat Apple, which has about a 70% share of the market. |
| 11 | 5812 | 1996 | Jollibee's prices are 5-10% lower than McDonald's. |
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