Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS
CHOICE 2 SEGMENTS: TARGETED COMPETITOR SEGMENT / STANDARD LEADER PRICE AGAINST ANOTHER LOW-END COMPETITOR
CHOICE 3 COMPONENT: CUSTOMER BASED LIST PRICE CHANGE
| No. | SIC | Year | Notes |
| 1 | 2111 | 2002 | For years, the main tobacco titans such as Phillip Morris and RJ Reynolds could raise prices without losing loyal customers. Now smokers are turned off by sky-high prices, either quitting or turning to smaller cheap brands which now command 10% of the market. In response, the large brands are offering short-term discounts but this cuts into their profits. |
| 2 | 4512 | 1986 | Eastern Airlines' deficit of $67.5m in the fourth quarter – its worst in a year – largely was blamed on the airline's overzealousness in matching People Express' $49 fares from New York to Florida. Eastern's operating costs 50% higher than People's. |
| 3 | 4512 | 2000 | In January of 1995, upstart Vanguard Airlines started offering three round-trip flights a day from Kansas City, MO to Dallas. The average one-way fare was $80, compared with $108 offered by chief rival American Airlines. In response, American matched the fares and boosted the number of daily flights on the route. Vanguard was forced to abandon the route and American cut back on flights and raised prices. |
| 4 | 4612 | 2005 | Southwest Airlines will soon be competing against two major carriers as it tries to move into Denver. The two carriers, Frontier and United Airlines, have already matched the low fares Southwest announced for its flights between Denver and other cities. With the comparable fares, passengers will be choosing between no-frills Southwest and two airlines that offer assigned seating and premium features such as first-class section, more leg room, and in-flight entertainment. Of course, the price wars will squeeze Frontier and United's profits. Southwest hopes to stay in Denver by outlasting its competitors who may not be able to sustain the rock bottom fares. |
| 5 | 4813 | 1990 | Sprint and MCI are feeling the heat from AT&T's offers of special discounts for big corporations. Competition has driven down the prices of calls on all 3 companies to levels fairly close to their costs. MCI and US Sprint continue to charge less than AT&T, but the difference is less striking than it used to be. |
| 6 | 6211 | 2000 | Fidelity and Schwab have been showering their customers with favors especially cutting prices to hold on to existing customers rather than to expand the market. The price reductions are aimed specifically at frequent traders. |
| 7 | 6211 | 2005 | Charles Schwab will cut trading fees, lowering commissions on many of its online-investor customers by 35%. The cuts will benefit about a million households with assets at Schwab between $50,000 and $1 million. Fees for these clients will drop to $12.95 from $19.95. Rivals such as Scottrade and Fidelity Investments have lowered fees in an effort to lure price-conscious traders. |
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