Raise Prices to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RAISE PRICE, RAISE PERFORMANCE AND COST BY SMALLER AMOUNT
CHOICE 2 ISOLATE SEGMENTS: CUSTOMER SEGMENTS WITH HIGH SERVICING COSTS
CHOICE 3 COMPONENTS: CHANGE THE BENEFIT PACKAGE
| No. | SIC | Year | Notes |
| 1 | 2011 | 1987 | Supermarkets aim for the "gourmet" market by adding chefs to prepare fancy meat products, and by retraining meatcutters to offer more service and recipe advice. |
| 2 | 2096 | 1994 | Frito-Lay's emphasis on supermarkets have left smaller channels such as convenience stores and small drug stores open for service from smaller niche players. |
| 3 | 2389 | 1992 | VF managers sell different brands (different price points) to specific retailers. Upscale brands like Girbaud jeans are sold to upscale dept. stores, while Wrangler and Rustler are sold to discount stores. |
| 4 | 2754 | 1996 | The price premium today has more to do with who the customer is than who the competitor is. Customers who can not use Quad's restrictive pricing model will give a competing company a premium because they need the full service. |
| 5 | 3621 | 1997 | Quick delivery times are very important to Baldor's customers especially the distributors; therefore, having available products and being able to deliver most any motor in less than 24 hours helps Baldor to secure sales. The margins on short lead time sales are also higher. |
| 6 | 3711 | 2005 | Toyota has created its own new economy-class drug plan. For medications taken on a regular basis, employees can save by using the company pharmacy or a mail-order service. Toyota will try to get employees to buy higher doses of medications and ask them to split the tablets. And the company will pay for the entire cost of some medicines if the employee uses a generic instead of a brand-name drug, in which case the employee may have a co-pay as high as 20%. |
| 7 | 4812 | 1998 | New prepaid cellular phone service allows users to buy cards worth a certain amount of money. The phone is activated by dialing a phone number and a personal ID number printed on the card. When the money runs out, the card can be replenished via a fresh payment. |
| 8 | 4812 | 2005 | Prepaid mobile phones are popular with new users, including senior citizens and teenagers. A range of traditional and prepaid companies have sprung up to provide these services. Virgin Mobile charges $49.99(T-Mobile charges $79.99) for a starter kit and phone calls are cheaper after a certain point. The pricing is straightforward and appeals to teens with "rescue rings," to escape from bad dates, and celebrity voicemail greetings. |
| 9 | 4812 | 2004 | The prepaid market is growing fast. It appeals to students and others with little or poor credit history who might have trouble subscribing to monthly billed service. Depending on how much people use their cell phones, prepaid can also be cheaper. |
| 10 | 4812 | 2005 | While the prepaid cellular market is limited, these plans are ideal for those who use a phone only in emergencies, parents who want to limit the cost of their child's bill and those with poor credit. Plans are on average $30 a month compared with a monthly subscription average of $60. |
| 11 | 4813 | 1992 | One upstart, Teleport says it often charges more than the regional telephone companies by promising better service and lower error rates in transmission. Serves private communications networks that link corporate offices. |
| 12 | 6141 | 1992 | Secured cards offered to people w/ poor credit histories. Such people are willing to pay interest rates as high as 22%, nonwaivable annual fees from $20 to $75, and application fees as high as $65. |
| 13 | 6141 | 1987 | The American Express Platinum credit card costs $250 a year for $10,000 of credit and some fancy extras, such as club privileges and a crack at scarce show seats. |
| 14 | 6300 | 2004 | One of Progressive's big successes was the pioneering move away from underwriting to pricing. Underwriting means risk acceptance or rejection at a given price. On the other hand, pricing means that there are no bad risks, only bad rates. This was a radical idea in the early 1990's but has since been copied. |
| 15 | 6324 | 2007 | Both Guardian Life and Humana have introduced multiyear plans designed to make health insurance premiums more predictable for smaller employers and reduce turnover. However, the plans could result in sharply higher deductibles and co-payments if medical costs rise more than expected. Humana introduced its "No Worry" program for employers with 51 to 99 workers. It requires employers to hand over a large percentage of workers' phone and email contact information and the completion of a health survey to get annual premium rises of no more than 6%. Employers who terminate the contract early will face a $25,000 penalty. |
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