Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: TARGETED COMPETITOR SEGMENT / STANDARD LEADER PRICE AGAINST A NEW ENTRY
CHOICE 3 COMPONENT: CHANGE THE LIST PRICE
| No. | SIC | Year | Notes |
| 1 | 3519 | 1986 | Cummins responded by dropping its prices on the medium-duty engines, even though it couldn't really afford to. CEO says, "If you don't give the Japanese a major price advantage, they can't get in. Besides, if we didn't lower prices, our truck manufacturing customer couldn't compete, either." |
| 2 | 3562 | 1988 | #1 in US with 60% market share, Timken did not try to retain a price advantage over threatening newcomers. Leader avoided Trap. |
| 3 | 4513 | 2000 | Airlines often launch aggressive pricing tactics against small competitors to establish a reputation. This can deter low-cost carriers from taking on the dominant player in all markets and scares off potential lenders who might consider financing the operation. |
| 4 | 5411 | 2006 | Wal-Mart's largest non-American operation, Asda, has been struggling recently as its top local rival, Tesco PLC, is thriving. Tesco has used its knowledge of shoppers to fight Wal-Mart's core appeal: low prices. After Wal-Mart bought Asda, Tesco searched its database and singled out shoppers who buy the cheapest available item, and would most likely be tempted by Asda. Tesco then identified 300 items that these price-sensitive shoppers bought regularly. One was Tesco Value Brand Margarine. Tesco lowered the price of the margarine, along with other products with similar profiles. As a result, shoppers didn't defect to Asda. In fact, Tesco's sales jumped 17% to $79 billion in the year ended Feb. 25, and net income rose 17% to $2.96 billion. |
| 5 | 7372 | 1993 | Borland selling database product for $139 down from $795; Microsoft follows suit, offering Access for $99 and sold 500,000 copies, 5x expectations. |
| 6 | 7372 | 1995 | Lotus Notes (with program development features) priced 16% under previous price ($275 v $330) in order to gain market share before Microsoft introduces its competing software, Microsoft Exchange. |
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