Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: REWARD CUSTOMERS

CHOICE 2 ISOLATE SEGMENTS: CUSTOMER COST SAVING SEGMENT

CHOICE 3 COMPONENT: CHANGE THE BENEFIT PACKAGE

No.	SIC	Year	Notes
1	2066	2008	Despite slowing economic growth, soaring commodities prices this year have forced manufacturers around the world to hike the prices they charge retailers, which in turn have raised their prices on consumers. Costco is working with its suppliers to rein in costs. For example Costco typically buys 70% of the premium macadamia nuts produced by Hershey. Now Costco working with Hershey to use its smaller nuts in one of its products so that Hershey will no longer have to unload at steep discount, so Hershey can ease its pricing on premium nuts.
2	4131	1993	Greyhound has introduced deep-discount fares, including "Go Easy Fares," which offer discounts of up to 50% for tickets purchased 21 days in advance.
3	4512	1987	American to increase its benchmark supersaver fare by $20 each way, add a new non-refundable 30-day advance purchase fare that would be $20 cheaper than the supersaver, and eliminate the industry's cheaper fare level.
4	4522	2006	Travelers wishing to use private jets can create debit accounts rather than buy hours. Sentient Jet allows customers to deposit money into a debit account, when the service is used, hourly fees and fuel charges are deducted from the account. Flight Options' JetPASS Ultimate Travel program operates on the same principle but adjusts the costs depending on the type of jet, day and time of travel.
5	4522	2006	Charter aircards offer a cheaper option for travelers wishing to use private jets. They often seek lower prices on flights that would normally be empty as a jet is either returning to its home base or going to pick up passengers in another city.
6	4522	2006	In response to increasing demand, companies which offer fractional ownership of private jets are promoting higher-end options in which users own a stake in a particular plane. This limits the risk of demand from exceeding supply on peak travel days. CitationShares launched Citelines which offers travelers a price break for traveling on nonpeak days and a flat annual rate of operating charges.
7	4800	2001	OmniSky offers unlimited access for $40 a month. The service costs $33 a month if you pay a year in advance.
8	4911	1988	One Florida electric company installed radio-controlled switches on water heaters & swimming pool pumps of willing homeowners, allowing devices to be turned off during peak consumption times. Others give rebates for energy-efficient refrigerators.
9	5541	2006	The discount dynasty in Wyoming, run by the Call family, keeps the gasoline cheap. In May 2004, iFuel opened for business, charging 10 cents a gallon less than other discounters. iFuel would operate by automated kiosks, cutting costs by having motorists use the Internet to pay with bank transfers. Its main rivals, Flying J and Maverick, at first lowered their prices to compete. Then they discovered that wasn't necessary because Evanston residents didn't seem to be flocking to the new cut-rate station. For the first six months, iFuel sold just 800 or 900 gallons a day, less than half its break-even level. Many town residents weren't yet on the Internet, and they appeared baffled by the station's sign, emblazoned with the company Web address.
10	5912	2002	Sales for online pharmacies are surging as the prices of prescription drugs go up and as customers continue to look for bargains. The top choice for online pharmacy was Drugstore.com. It offered prescription drugs at the cheapest price (with a $10 discount for first-time customers), gave price quotes for both generic and brand-name drugs, had the fastest online delivery, and had detailed directions on how to use the drugs. The worst features were that the site's search function was not user friendly and, at one time, the site offered a product that was discontinued by the manufacturer.
11	5999	2004	Online photography sites like Snapfish, the online arm of District Photo Inc., and closely held Shutterfly Inc. will print digital photos for 29 cents or less – under 20 cents for those who prepay – and mail them to customers in a day or two.
12	6211	2002	Investment firms are shifting their approach to smaller accounts in an effort to cut costs. Many investors have been switched to call centers instead of an individual broker. Prudential shifts accounts of less than $25,000 to call centers. In some cases, this shift may improve customer service and expertise and drive down fees as they were largely ignored by individual brokers.
13	6211	2005	Ameritrade recently cut pricing for option trades to $.75 a contract from $1.50 and has introduced a bare-bones program called IZONE that offers $5 trades to customers who place orders on line or by touch-tone phone.
14	6211	2005	Escalating the price war at discount brokers, Ameritrade Holding Corp. is testing a program called Izone that offers trades at about half its regular commission. The barebones program is available online or by touch-tone phone only, and doesn't include live price quotes, news, research, or other tools that Ameritrade offers to customers who pay its conventional $10.99 for stock trades. Izone users must pay an extra $9.99 a month, after a three-month free offer, for those features, and more for analytical tools and news reports. if they call for broker assisted orders, they must pay at least $24.99 a trade. In an effort to ensure that users are self-sufficient investors, Ameritrade requires Izone users have two years' experience as a discount-broker client and at least two years' experience as an Internet user.
15	6321	2006	Direct contracting helps big employers save money by cutting out the middleman and extra layers of bureaucracy and cost. A year ago, Waste Management signed a deal with Kelsey-Seybold Clinic, a local doctors' group practice, to provide medical services for employees. Waste Management made the decision after an analyst's report found that Kelsey-Seybold's plan would be 16% cheaper than a regular insurance plan. Employees at Waste Management's headquarters can choose between a Kelsey-Seybold plan, called KelseyCare, or a Cigna PPO plan. KelseyCare can save corporate clients 15% to 30% on their health insurance costs. The savings come from better coordination of data and treatment. The idea works best in major metro areas. That's where medical groups are big enough to offer the widest range of expertise.
16	6531	2003	Some full-service firms have experimented with their own cut-rate options. For instance, Coldwell Banker is testing a service dubbed Blue Edge in parts of Pennsylvania and Illinois, offering 2% commissions for a reduced level of service.
17	6531	2006	In the fight between traditional real-estate brokers and their discount rivals, some consumers are getting caught in the crossfire. One likely to stir up more disputes involves the discount firms that offer rebates to buyers. The practice got a boost this year with the launch of two ambitious companies, BuySide Realty Inc. and Redfin Corp., which are promoting this concept heavily as they try to build national brands. Both encourage buyers to do part of the work in finding home; they don't offer the free car rides from house to house provided by most traditional agents.
18	7011	1986	Days Inns offers "supersaver" discounts. Guests pay $19 to $29 if they make reservations 30 days in advance.
19	7514	2005	In an effort to reduce the number of no-shows and the resulting financial loss, car-rental firms are introducing various techniques to ensure that customers claim their cars. Alamo Rent-a-Car offers a prepayment program which offers online customers who pay at the time of reservation a 10% discount. Those who cancel within 24-hours or fail to show up will pay a $25 penalty while those who cancel before that period will pay $10.
20	7999	2009	Squaw Valley will announce its plans to slash the cost of its season pass by nearly $1,000. It's somewhat of an experiment, and there are unknown repercussions on slope traffic, but the recession and the celebration of two key anniversaries at Squaw make this the right time to do it. An adult full season pass at Squaw used to cost $1,449 if bought by July, $1,549 is bought by September, and $1,889 afterward. The new prices will be $369 Bronze pass (most blackout dates), $469 Silver pass (fewer blackouts), and $949 Gold pass (unrestricted).

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