Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: TARGETED COMPETITOR SEGMENT
CHOICE 3 COMPONENT: PROVIDE A REBATE
| No. | SIC | Year | Notes |
| 1 | 2084 | 1991 | Because all competitors participated in coupon or refund discounting, this practice did not give one competitor a significant advantage over another. The standard discount was a $1 rebate off the 1.5 liter jug. Gallo's discount, though, was the most successful because it offered the best value for the price, and was offered regularly. Taylor California embarked on the most drastic rebate offer in 1983, when it offered a $3 rebate. Retailers unexpectedly dropped the price to $3 and advertised the product as "free", which ultimately hurt the brand's image. |
| 2 | 2800 | 1987 | Monsanto, facing new competition when its Lasso herbicide patent expires in December, cut the price of the weed killer for the first time since it was introduced in 1969. Ciba-Geigy is offering rebates on its product Dual (Lasso's competition). |
| 3 | 2834 | 1994 | When SmithKline Beecham's Tagamet ulcer drug came off patent in May, it offered up to 20% rebates on its brand name product. |
| 4 | 3571 | 1986 | IBM slashed dealer prices of PCs in response to clones. Size of the decrease varies w/ dealer sales volume and model, & a promotional allowance from IBM could result in further cuts at retail. Dealers say they can now sell IBMs at same price as clones. |
| 5 | 3711 | 1998 | Ford last week began offering to honor GM rebates. |
| 6 | 3711 | 2005 | The nearly $2,900 a vehicle it spent on incentives is a third less than what GM spent. But that's an 11% hike from last year. Toyota's incentives are forcing Nissan and Honda to discount more heavily. Nissan's incentive spending has surged 35% in the past 12 months to an average $2,100 a vehicle. |
| 7 | 7011 | 2002 | Both Six Continents PLC and Starwood Hotels & Resorts have announced that they will undercut rates offered by online discounters such as Hotels.com by 10%. The discount sites have proved to be a formidable opponent as more customers are computer savvy. Customers must go to the hotel's website and note the list price on rooms and then search for prices on discounters. If they find a cheaper price, they must then book it though the hotel's service and contact the hotel for a rate reduction. |
| 8 | 7011 | 2003 | Marriott is offering a 25% discount to any customer who can beat Marriott's price at one of its hotels or Web sites. It is the latest salvo in the war between hotel firms and the plethora of Web sites and other outlets that sell their rooms. The strategy gives a powerful incentive to individual Marriott hotels to toe the line and keep to Marriott's pricing. The idea behind the strategy is to persuade travelers that they don't have to shop around to get the best price on a room at one of Marriott's chains. |
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