Raise Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RAISE PRICE, RAISE PERFORMANCE AND COST BY SMALLER AMOUNT
CHOICE 2 ISOLATE SEGMENTS: CUSTOMER SEGMENTS WHO REQUIRE A SPECIFIC PRODUCT SYSTEM COMPONENT
CHOICE 3 COMPONENT: CHANGE FUNCTION AND PRICE TOGETHER
| No. | SIC | Year | Notes |
| 1 | 2043 | 2003 | Instead of pushing heavily discounted boxes of Raisin Bran, for instance, Kellogg introduced Special K Red Berries cereal containing freeze dried berries. The retail price averages $4.36 per pound for Special K Red Berries, nearly double the price of Kellogg's Raisin Bran. Kellogg has also licensed the Walt Disney name to hook kids with cereals like Mickey's Magix and Mud & Bugs, getting parents to pay an average $3.77 per pound. The average Kellogg cereal sells for $3.11. |
| 2 | 2834 | 1993 | Wyeth-Ayerst launched Norplant in the US at a price of $350. In other countries, Norplant costs clinics as little as $23. |
| 3 | 2834 | 1991 | Most European governments bargain prices down to levels that cover companies' manufacturing and distribution costs, but much less of their research. Americans pay an avg. of 54% more than Europeans for 25 commonly prescribed drugs. |
| 4 | 2844 | 1992 | Colgate copied P&G's upright toothpaste dispenser 1.5 years later. Colgate's upright sells for 15% less than P&G's neat-squeeze and 15% premium to regular tube. |
| 5 | 3011 | 1972 | In the case of the radial tire, domestic competitors lost significant share and their reliability in market presence was reduced. Michelin was able to succeed in the US market as a result of domestic tiremakers' failures to produce radial tires. In 1966, Michelin entered the US market with radials at the request of Sears. The radial tire was 30% more expensive than bias plys. In 1970, Michelin began to sell radials under its own brand name and by 1972 had 50% of the radial market; radial tires represented 10% of the total market at that point. Goodyear did not introduce its first radial tire until 1972. Goodyear, as well as many other US manufacturers had attempted to dissuade customers from radials by offering steel bias tires. Steel bias tires were better than bias-ply but not as good as radials. Their greatest advantage benefited the manufacturer; steel-bias could be produced with existing equipment and required no capital investment. By not developing their own radial technology, domestic producers left the value window open and this failure resulted in Michelin's success. Innovations and high quality were now associated with Michelin. Domestic competitors eventually moved into radials not because of an umbrella but because of the volume radials generated. Domestic competitors needed to develop redials in order to stay competitive. Initially, radials were a Performance Leader price point but due to the volume generated, it became the Standard Leader. |
| 6 | 3421 | 1990 | Gillette is trying to reemphasize the importance of the shaving system vs. the disposable razor. (Higher profit margins: 8-10 cents/disposable razor, vs. 25-30 cents/cartridge refill). Gillette's new Sensor is $3.75, well below Atra and Trac II, hoping to lure shavers from the older products. But cartridges will cost 25% more than those for Gillette's old systems, giving it about 8 cents more gross profit per cartridge. |
| 7 | 3421 | 1992 | Gillette, the industry's leader, priced its new Sensor replacement blades for women 3x more than traditional disposable razors. |
| 8 | 3711 | 1995 | Big trucks are getting leather seats, fancy stereos, and a boatload of accessories once found only in luxury cars. |
| 9 | 4512 | 2008 | With the cost of jet fuel increasing, airlines have increased ticket prices. All these fees are one reason airlines rate below the IRS and gas stations for customer satisfaction. American and other carriers soon will offer in-flight Wi-Fi, which will cost $10 to $13 per flight. |
| 10 | 4812 | 2009 | The bane of the budget is "Bill Creep." For a cellphone, a typical month of local service today now costs about $48.50, about a dollar a month less than in 2003, and you get about 60% more minutes` But the harsh reality is that the typical bill is more like $76 a month, says TNS, a New York-based market research firm. Families keep adding phones and minutes and a slew of additional services, such as text messaging, ringtones and games. |
| 11 | 4841 | 2005 | Satellite providers were early proponents of digital video recorders, and it helped them lure away cable customers. But they no longer have that advantage. Now half of the 6.5 million U.S. households with DVRs get them from satellite firms, and a quarter of them bought the devices directly from DVR makers, mainly TiVo. It charges $12.95 a month for DVR services. That leaves 25% of the market that gets DVRs from cable TV firms. Time Warner charges subscribers $9.95 monthly for DVRs, while Comcast charges $9.95 monthly for set-top boxes equipped with high-definition TV and DVR. |
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