Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS

CHOICE 2 ISOLATE SEGMENTS: OCCASION SEGMENT

CHOICE 3 COMPONENT: CHANGE THE LIST PRICE

No.	SIC	Year	Notes
1	0	2003	Online companies can segment their customers quickly using a range of information. This segmentation would be nearly impossible in a traditional retail or service environment. Clickstream technology and cookies allows a greater depth of information which allows a company to offer a segment-specific price or promotion immediately. This preserves margins and customers.
2	1521	2006	Builders and developers have turned to auctions to unload newly built homes as the market slows and contract cancellations increase. Builder confidence is at a low and both builders and developers are struggling to pay overhead, taxes and interest on their loans. As builders make up to a 40% gross profit on homes, they can reduce prices to sell quickly. This measures can translate into a 20% discount for buyers.
3	1521	2007	As the housing market slows, home builders are rolling out incentives to encourage sales. Hovnanian Enterprises launched a "Deal of the Century" promotion which offers discounts of up to $149,000. The best discounts were available on homes that were already started.
4	2000	2009	Makers of household goods and food are paying more attention to the "paycheck cycle" as cash-strapped consumers are showing a tendency to make their largest purchases when their salaries first come in and to cut back as that money runs out. PepsiCo Inc.'s Frito-Lay snacks business in some stores has tried "promotions that are different at the beginning of the month than at the end of the month. People have more money to spend at the beginning [of the month] and a little less at the end. The first of the month we might promote bigger sizes and at the end of the month we might shift down to smaller sizes in order to keep our sales growth going. It's worked well."
5	2037	1986	In 1980, 47% of COJ was purchased on deal. By 1986 this number had increased to 63%.
6	2840	1992	In forward buying, supermarkets pounce on special wholesale deals & stock up on far more merchandise than they plan to sell during the promotion. Later, they get a wider margin by selling goods at reg. price. Or they sell it to other retailers.
7	3651	2007	Syntax offered its 32-inch Olevia LCD TV sets for $475, half of its normal price on the day after Thanksgiving. This tactic, which allowed Syntax to outsell Sony, forced rivals to lower their prices and put Olevia on the radar. As a result, consumers are seeing lower prices in stores even as consumer electronics stores suffer.
8	3711	2007	Ford Motor's Ford Family Plan allowed customers to buy most 2005 models at the employee rate. The popular Mustang, GT and Escape hybrid were excluded. The promotion was combined with existing cash incentives, taking even more off the price. A Ford Explorer XLT which normally sells for $32,895 is sold to employees for $28,739. After incentives, customers will pay only $24,749.
9	4512	2008	Virgin America is revamping its frequent flier program. Virgin America says it can raise the conversion rate for points to pay fares at peak travel periods, or lower it on flights that aren't selling well. Thus reward sets are available without any capacity restriction or blackout dates.
10	4724	2009	Orbitz Worldwide Inc. plans to announce Wednesday that it will reduce the service fee it charges travelers to book hotel rooms on its Web site through July 15, upping the ante after recent online travel-agency moves to cut the fee on airline-ticket bookings. Booking a hotel room on Orbitz will be cheaper than it will be on competitor sites like Travelocity.com and Expedia Inc.'s Expedia.com about 80% of the time. When Orbitz is cheaper, the average savings will be $7 a night. Expedia Inc. says its fees are and will be competitive with Orbitz, and, in addition, it is often able to use its size to negotiate better base rates than Orbitz. Sabre Holdings says its site charges fees only on hotel rates that have been negotiated at a discount. Orbitz "Dare to Compare" promotion aims to grab market share from competitors.
11	5311	2001	Customers don't appear to be responding to Kmart Corp's deep price cuts on thousands of items, which the discount chain instituted with considerable fanfare this past spring. Kmart has permanently slashed the price of nearly 50,000 items so far as part of Bluelight Always. The Bluelight Specials program involves daylong discounts on certain products that are supposed to be brought out in a cart once an hour to a canopy where sirens and a flashing blue light flag the special. But individual stores don't always offer the specials—one reason why the promotion appears to be a bust.
12	5311	2001	End-of-season sales were introduced in the 1950's as a way to clear inventory and free up cash. In the 1960s, department stores added back-to-school sales to draw in customers. However, with new competition from discount stores and their improved offerings, department stores have found themselves forced to constantly stage sales to lure in customers.
13	5331	2008	Costco is known for its constantly changing selection of high quality goods, which entices shoppers to make impulse buys. Anyone can walk into Wal-Mart for cheap underwear, but getting a discount Cartier watch is something else, especially when customers know it may not be there when they come back. Costco is a place where even the highly affluent like to brag about shopping. The average member household makes upward of $75,000 a year.
14	5621	2004	The issue facing Talbots is how to keep prices up in a world of discounting, one of the biggest challenges facing retailers today, ever since the explosion of low price formats. In the 1990s stores of every type have fired back with an ever expanding number of sales. In addition to the traditional markdown, retailers try to entice shoppers with one day sales that often stretch to two. White Sales, Back to School Sales and sales for every major holiday.
15	5719	2003	As the nation's biggest chain of upscale closeout home goods, Tuesday Morning follows a unique schedule tied to peak selling seasons. The company stages 10 multiweek sales events a year for a total of 250 shopping days.
16	5812	2005	Fast food restaurants such as Burger King, Taco Bell, KFC, and Wendy's are using software that makes real-time sales pitches based on the change the customer is about to receive. The software runs on a cash register and instantly generates a discount offer for another food item based on the change that would be returned on an even amount. The software was developed from an updated database of previous offers and their acceptance rates. If the system discovers that more customers who bought hamburgers will buy fries with the resulting spare change than they would buy a milk shake, the system will offer french fries to future hamburger buyers. 35% of all spare change offers are accepted and most of the time customers pay 35% to 45% less for added items than if they had bought it separately. Customers accept and appreciate the technology when its convenient.
17	7900	2009	Some discounts occur around occasions. Northstar at Tahoe ski resort offered a $25 tax relief ticket. This ticket saved the skier $54 and allowed the owner to ski or ride on Wednesday, April 15, for that low price.
18	7900	2009	Northstar at Tahoe offered $40 Earth Day's two-pack, which saved the skier $118. This pass allowed the skier to ski on April 18 & 19 only for the price of $40 per day. $5 of each pak will go towards a Green Tag purchase to offset carbon emissions.
19	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.

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