Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS
CHOICE 2 SEGMENTS: TARGETED COMPETITOR SEGMENT / STANDARD LEADER PRICE AGAINST ANOTHER LOW-END COMPETITOR
CHOICE 3 COMPONENT: CHANGE FUNCTION AND PRICE TOGETHER
| No. | SIC | Year | Notes |
| 1 | 2731 | 1994 | Competitors like Research Institute of America grabbed chunks of CCH's business with easier-to-use products at cheaper prices. CCH fired 1,200 of 7,000 workers in 1991. CCH introduced a CD-ROM-based guide to the federal tax codes. |
| 2 | 2731 | 2004 | Faced with mounting criticism that the cost of new textbooks is too high, and vexed by students who buy cheaper used texts, Pearson PLC is making 300 of its most popular US college textbooks available in a Web-based format for half the price of the print versions. |
| 3 | 3421 | 1986 | Cheap, disposable razors account for more than half of US sales: mean lower profits, even though Gillette sells them too. Gillette's foreign business is 57% of sales and 61% of profits, but foreign razor and blade markets are mature. Gillette is introducing a new line of low-price personal care products. |
| 4 | 3421 | 1992 | In 1962 Gillette was at highest US mkt. share ever: 72%. Gillette is leader in Europe with 70% mkt. share and in Latin Amer. with 80%. Competition made popular stainless steel blades: Gillette decided to copy rather than ignore, even though higher manufacturing costs. Then Gillette brought out a cheaper, disposable blade to compete with others' disposables, even though less profitable. |
| 5 | 3571 | 1992 | Compaq has won back 90 corporate clients (VL customers) since mid June and has entered the home-PC market with its ProLinea machine. The number of PCs in American homes will grow by over 25% to 15 million by 1996, according to one estimate. Both Dell, which pioneered mail-order selling, and Apple, which only sold through authorized dealers, will now sell to mass merchants. Compaq dropped prices as much as 32% and rolled out a new line of machines for under $1000. Compaq designed a product with the cost of mfg. in mind, not just raw computing power. The company turned down Conner Peripheral disk drives and opted for cheaper ones. Operating costs will drop from 28% of revs in 1991 to 24% by 1992. |
| 6 | 3579 | 1980 | In four years, from 1976 to last year, Xerox introduced 6 machines aimed at the low-end. They filled out Xerox's product line, and Xerox has made major gains in the low-volume end of the market. |
| 7 | 3674 | 1999 | Intel Corp. is accelerating price cuts on its Celeron microprocessor to fend off AMD in the market for low-cost PCs. |
| 8 | 4512 | 2004 | Ted is a cheap way to travel, but it has plenty of room to improve as a discount airline. Ted flies Airbus 320s, a foot wider than Southwest's B-737 – but it's chockablock with 156 seats. Robust Starbucks coffee is served along with 55-calorie minipretzels. Free headsets are passed out to watch a small video monitor spaced every four seats, but there's not seat-back TV. It's also impossible to open a laptop without reverting to the clam-shell position. |
| 9 | 4813 | 1993 | AT&T responded to MCI's low-cost collect calls with its own service: 1-800-OPERATOR. AT&T's service will match the price of any other service that's out there. |
| 10 | 4841 | 2002 | Charter Communications is fighting back against the satellite threat with lower-cost packages and a hold on rate hikes. |
| 11 | 4841 | 2004 | If cable firms lose significant market share in 2004, many analysts expect them to roll out more tiered pricing plans. Those plans cost less than the typical $45 monthly cable Internet fee, but data speeds are slower. The Bells already offer discounts on slower DSL speeds. |
| 12 | 5411 | 1992 | Giant Food in each of its 154 stores has set up a warehouse-style aisle, stacked high with oversized packages of toilet paper and other goods, at prices comparable to warehouses. |
| 13 | 6211 | 2000 | Schwab has acquired Cybercorp as its low-end price point. |
| 14 | 6211 | 2005 | E-Trade launched the latest attack in the online brokerage market's growing price war. Web brokers justify the price cuts by cutting costs and attracting more customers from high-priced offline rivals. Scottrade also slashed prices to $7 a trade and Ameritrade announced a bare bones service that halved its regular fee to $5. Schwab announced a new round of commission cuts in response to Fidelity's move. Schwab and Fidelity have tried to separate themselves via better service and trading tools but as low-cost brokers beef up their offerings, they must cut prices. Active and wealthy customers benefit most from the price war in hopes of luring them from high-fee traditional brokerages. |
| 15 | 7372 | 2005 | Electronic Arts Inc. and Take-Two Interactive Software Inc. are battling over sports rights in the video game world. For its plunge into sports, Take-Two, rather than spend years developing its own video games, agreed to co-publish and market a line of football games using ESPN broadcasters and cable-station insignia. Their publisher, Sega Sammy Holdings Inc., which was pricing them at the same $50 level as Madden football, sold only 361,000 copies in the U.S. in 2003. When Take-Two cut the price to $20, the fans responded. In just the second half of 2004, Take-Two and Sega sold 2.7 million copies of the ESPN football games in the U.S., for $53 million at retail. The offensive pressured EA, which pared the price of Madden football to $30. That game remains much more popular. Fans bought 5.6 million copies of Madden football last year, which was up 10% from 2003. |
| 16 | 7375 | 1999 | It is still possible that free ISPs could force AOL to cut its prices. While AOL maintains that subscribers to its main service aren't price sensitive, the company has stepped up promotion of other discounted online services to counter the free ISP threat. In the U.S., it has retooled its Compuserve service as its "value brand," christening it Compuserve 2000 and charging $9.95 a month for 20 hours. |
| 17 | 7375 | 2003 | In the face of increasingly aggressive price competition, AOL Time Warner Inc.'s America Online is quietly readying another dial-up Internet service that will be cheaper than its flagship $23.90-a month service. The new service will carry the Netscape name, and it won't offer as many features as America Online's premium service. For instance, Netscape users will get only one e-mail address instead of the seven offered by AOL, plus a home page that includes news and a Google search function. The Netscape service, which is expected to cost $9.95 a month and will likely be launched early next year, is being referred to as “raw Internet access.” |
| 18 | 7800 | 2005 | Some media companies are trying to reverse the tide of piracy by cutting prices on legitimate DVDs and CDs low enough to challenge the pirates at their own game. Time Warner Inc.'s Warner Bros. The studios have a plan of attack for early releases of pirated DVDs, too. Warner Bros. plans to release more than 125 movies this year in China, including hoped-for block busters on disks, with English and Mandarin dialogue tracks, and $3.38 for fancier versions with extra footage and language enhancements. |
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