Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS
CHOICE 2 SEGMENTS: INDIVIDUAL CUSTOMER SEGMENT / A LEADING CUSTOMER IN THE CUSTOMER'S INDUSTRY
CHOICE 3 COMPONENT: CHANGE THE BASIS OF CHARGE
| No. | SIC | Year | Notes |
| 1 | 7311 | 2001 | Nestlé is shifting the way it pays ad agencies amid a change in its emphasis from TV to less expensive forms of marketing. Nestlé spends $2.2 billion each year to market Toll House morsels, Butterfinger bars, Lean Cuisine, Stouffer's, Ortega foods, Powerbar, and more. In the past, it paid ad agencies as much as 15% of total ad spending in commissions. Now, it will pay all agencies in the US annual fees based on their hours invested in developing advertising. It will pay bonuses to its agencies when an advertised product gains market share or posts higher sales. Its goal is to get better performance, not lower what it pays. |
| 2 | 8011 | As health care providers, such as HMOs, had to face capitation, they often had cost structures where physicians were on staff . The payers have now forced the independent physician industry to captitate as well. |
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