Raise Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RAISE PRICE, RAISE PERFORMANCE AND COST BY SMALLER AMOUNT
CHOICE 2 ISOLATE SEGMENTS: DUE TO A UNIQUE FUNCTION
CHOICE 3 COMPONENT: CHANGE MAIN PRODUCT/REDUCED RESOURCES REQUIRED/MONEY
| No. | SIC | Year | Notes |
| 1 | 3462 | 1995 | ABC Rail recently introduced the roundest wheel in the industry. Although the company is only charging a nominal 1-2% premium for the "Round One," the customer benefits, including longer wear and a smoother ride, should ensure that ABC Rail continues to maintain or increase its current 25% share of the North American locomotive and freight car wheel market (No. 2 in the industry). |
| 2 | 3576 | 2000 | Juniper boasts faster machines in a more compact package. Its top router can process data at 10 gigabits a second, four times the speed of Cisco's best machine. So even though Juniper's biggest machine costs $400,000 on average, twice the price of Cisco's, Cisco didn't need the fastest routers when it was zeroing in on just the corporate market. Whenever rivals like 3Com came along with more powerful boxes, Cisco just offered its customers deeper discounts on older, slower machines. That meant customers could get the same number of bits processed per buck and kept them from switching suppliers. Cisco has reason to worry because Juniper is taking share in the fastest-growing segment of the market. |
| 3 | 3577 | 2007 | Hewlett-Packard argues that its introduction of smaller, cheaper cartridges with a higher per page printing cost is not part of an effort to confuse consumers. Instead, they are designed for consumers who don't print much and wish to reduce upfront costs. |
| 4 | 3674 | 1992 | Intel has a new "flash memory" chip. It has 20-megabytes of memory at $611, or about twice the price of a hard disk with the same capacity. Could be used for portable computers. Unlike conventional memory chips, these store data even after the power is turned off, yet permit repeated programming and erasing. |
| 5 | 3674 | 2003 | Intel unveiled the first result of its new design focus on processor utility over raw speed as the Pentium M. It used less than one-third the power of earlier chips, and in tests, it performed calculations more quickly than many existing microprocessors higher clock speeds. It was also about two-thirds their size, making it less costly to manufacture. Yet the new chip commands a higher price: a 1.7 gigahertz Pentium M is roughly equivalent in performance to earlier portable chips operating at 2.4 gigahertz, but Intel gets $182 more for it. |
| 6 | 3691 | 1991 | Several companies (Sanyo, Gates) are offering new lines of rechargeable batteries, to try to get consumers to throw away their disposable alkalines for good. A pair of AA-size rechargeables costs about $7, compared with about $3 for a four-pack of disposable alkaline batteries. Right now, rechargeable nickel cadmium batteries account for only 8% of the market. |
| 7 | 3842 | 2004 | Wright got Food and Drug Administration approval for its ceramic hip in 2003. These artificial hips can last for decades instead of the usual 10 to 12 years for the conventional metal and plastic joints. The product has since become a major source of top-line growth for Wright. Their artificial hip sales increased 48% during the last 4th quarter. They climbed 37% for 2003; hips accounted for 31% of total revenue for the year. At $10,000 each, the ceramic hips are much more expensive than traditional plastic-and metal devices which cost about $4000. Ceramic joints should continue growing in usage; they only account for 5% of US replacements and 25% of European replacements. |
| 8 | 5900 | 2004 | PriceGrabber is an online comparison site for shoppers. It doesn't charge the merchants it hosts in its Storefronts section to list their products, or customer referrals. But it takes a cut of $1 if the product costs less than $15; 7.5% of the price if it costs more. Yahoo's shopping portal takes referral fees from the small merchants it hosts but it gives the sellers a 20% discount on those fees. Froogle's listings are not placed in any kind of order. But the site is entirely free of charge, with no fee for customer referrals. |
| 9 | 6111 | 2005 | While shop owners who accept American Express credit cards like that cardholders are normally bigger spenders, they dislike the higher fees charged by AmEx than by Visa and MasterCard which charge about $2 for every $100 in comparison with AmEx's $2.50 fee for the same amount. |
| 10 | 6141 | 2002 | American Express has begun to replace the green and yellow American Express card with new charge cards that allow holders to earn merchandise points and frequent flier miles for every dollar charged. Only one fee is charged, from $65-$130 compared to the $55 for the green card that did not earn any points. |
| 11 | 7300 | 1994 | Catalina's checkout-stand generated coupons are a whole new product with the benefit of tailoring coupons to customers, based on what they already bought. Catalina's coupons cost $2.30 per coupon, vs. 90 cents per newspaper insert coupon. But when measured by the cost of persuading a Brand A user to buy Brand B via a coupon, Catalina's coupons cost about 1/3 as much as the newspaper inserts. |
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