Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: INDIVIDUAL CUSTOMER SEGMENT
CHOICE 3 COMPONENT: ALLOW THE CUSTOMER TO SET THE PRICE
| No. | SIC | Year | Notes |
| 1 | 2000 | 1990 | Traditionally, spice peddlers have to pay the store in return for a one-to-three-year contract for shelf space. This payment often takes the form of a special "discount" ranging from 2% to 25% of the wholesale price, and is often paid up front. |
| 2 | 2000 | 2004 | A supermarket must make room for a new product, typically by getting rid of something else, which is risky. The problem with slotting fees is that they are unscientific and can be manipulated. Slotting fees for bulky items in stores could reach $50,000 or more. They have become another way for retailers to make money from suppliers, rather than from customers. |
| 3 | 2499 | 2004 | The company is attempting to meet the falling competitive price by meeting competitive prices as defined by the customer at key accounts. They have not gone after non company customers with their message that they will meet market prices, and at the moment the pricing pressure only exists in the west, not in the mid-west and east, and only with the big customers. |
| 4 | 2865 | 1999 | There are some industries, and we are one of them where the largest customers simply dictate what the price is going to be for next period of time, and ask you if you want to play, or if you don’t want to play. |
| 5 | 3312 | 1982 | It used to be that steel makers set the prices for GM – now GM is largely dictating the price it is paying for steel. In 1982 it is expected to pay on average 3% less. It used to be that all customers were charged one uniform price. |
| 6 | 3714 | 1991 | In 1989, Chrysler replaced its competitive bid process with target costing for each specific component. |
| 7 | 3714 | 2000 | ArvinMeritor Inc., the largest maker of heavy-truck axles, said DaimlerChrysler AG is likely to have more success in obtaining a gradual 15 percent cost cut from suppliers than an immediate 5 percent reduction. Suppliers say they can't afford to take an immediate 5 percent cut at a time of declining U.S. auto sales, though they may be willing to spread the reductions out over a longer time frame. The automaker made the demand as it lost at least $1.75 billion in the second half of last year on increased incentives and declining demand for its vehicles. |
| 8 | 7372 | 2005 | Governments in Europe, South America, and Asia are turning to open source software, or using the threat as a leverage to get Microsoft to cut prices. Microsoft cannot afford to lose government agency clients which make up 10-15% of its revenue. |
| 9 | 8111 | 2009 | Instead of paying for hours worked, more clients are paying Cravath flat fees for handling transactions and success fees for positive outcomes, as well as payments for meeting other benchmarks. |
<< Return to Choice 3