Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: CUSTOMER COST SAVING SEGMENT
CHOICE 3 COMPONENT: CHANGE THE BENEFIT PACKAGE
| No. | SIC | Year | Notes |
| 1 | 4812 | 2006 | As cellular service providers roll out Internet-accessible services and devices, consumers are finding that their access may be limited. Alltel Corp, a smaller carrier, rejects the limitations that larger rivals have imposed, arguing that customers are unlikely to accept restrictions after years of unlimited all-you-can-download internet plans. Instead, it offers unlimited data services but also offers a cheaper plan for occasional users that allows two megabytes of downloads for $8 a month. |
| 2 | 5541 | 2006 | The discount dynasty in Wyoming, run by the Call family, keeps the gasoline cheap. The first chain, called Maverick, was started in the early 1960s. Today, it has about 175 stations across the Western U.S. and Canada. While other gas-station owners of the era bragged about good service, Maverick specialized in stripped down stations with gravel driveways and offices barely big enough to fit a desk. Maverick helped to pioneer the self-service pumps and gas station convenience stores in the region, slashing their labor costs and boosting their revenue with high margin items like milk and candy. |
| 3 | 6300 | 2005 | The middle market includes companies paying premiums of $50 thousand to $1 million in annual payments. Most of the middle market is on a "guaranteed cost" basis, while many of the fortune 2000 companies are on a "loss sensitive" basis. With a guaranteed cost, the price is stated at the beginning of the policy. With loss sensitive, the insurance company and the insured share the losses, so the cost for the policy depends on what the loss experience is. |
| 4 | 6300 | 2005 | Much innovation is price-based. For example, the industry has raised deductibles, in some cases up to $5M on auto insurance. |
| 5 | 7372 | 1990 | Software companies generally have sold upgrades to existing users for about one-third of the discounted retail price of a new product. |
| 6 | 7372 | 1990 | Release 3.1 has a list price of $595, the same as Release 3.0, but $100 more than older versions. People who have Release 3.0 can upgrade for $35. Those who have the year-old Release 2.2 can upgrade for $75. Users with older versions can upgrade for $150. |
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