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: PRODUCT BASED LIST PRICE CHANGE – MAIN PRODUCT

No.	SIC	Year	Notes
1	1021	1991	At the beginning of hostility, there were two price points: PrL and SL. Initially, Standard Leaders (domestic producers) lost share to Price Leaders (imports). By meeting the import price in 1984, they essentially eliminated the PrL price point and made the industry 100% SL. In this industry, win/loss as a result of price point coverage was a domestic/foreign issue rather than a competitor specific issue. Because price was the primary benefit offered by imports, once the domestic price dropped low enough, customers received better performance at what was a similar or only slightly higher price.
2	2000	2003	The US consumer goods industry is about as competitive as a sector can get. Mature product categories and consolidating customers make it hard for companies to achieve the double-digit growth rates that many aspire to. Retailers such as Wal-Mart, with an everyday-low-price strategy account for more than 50 percent of industry sales. Unfortunately, the low price strategy can depress overall price levels for consumer goods suppliers. Top-performing ones use market data to show such accounts that matching the lower price offers of only certain competitors or only certain brands, for a limited time, can be more profitable for retailers—and their suppliers—without damaging their low-price image among consumers.
3	2084	2002	With more and more wine drinkers admiring the caliber of California labels, vintner succeeded in pushing retail prices up by roughly a third in recent years. Now, prices are being pushed down by a grape surplus, soft economy, and strong dollar (which has allowed rivals from Chile and Argentina to undermine US winemakers). Sutter home had to cut its prices from $7.99 to $4.99.
4	2096	1991	Frito-Lay has slashed prices to come within striking distance of discounting competitors. Before the price wars, F-L had premium pricing.
5	2111	1993	Philip Morris said Friday it plans to cut the price of its premier Marlboro brand by as much as 20% and forgo any increases on other major brands.
6	2676	1996	In early 1995, determined to take back the low-price segment from Drypers, P&G slashed prices on its cheaper Luvs brand by 11%. Kimberly-Clark followed. Drypers cut its prices by 17% but that wasn't enough. Drypers lost 1/5 of market share.
7	3571	1986	IBM's latest round of price cuts incl. up to 18% off on some models. Now planning more aggressive response to clones, likely to encompass deeper price cuts.
8	3571	1990	Compaq is now becoming far more aggressive on pricing, cutting tags twice this fall–by 25% on some models. Now Compaq's regular office PCs carry only a 12% premium over clones. Some models are selling for 10% less than comparable IBM PS/2s.
9	3652	2003	The decision by Universal Music Group to cut wholesale CD prices 25% was revealed this month. The pricing policy change will tip the retail balance further away from struggling specialty music retailers. Universal is pushing retailers to accept terms quickly, initially demanding they sign an agreement to commit to the new pricing structure. Universal, a unit of Vivendi Universal SA wants a verbal agreement by its retailers and if they fail to agree, the prices charged for the CDs won't drop until the end of the year at the earliest.
10	3674	2001	Intel, which has adopted the industry trend towards price cuts in 2001, slashed the bill for its Pentium 4 chips by as much as 50%. This is part of an effort to gain market share lost to Advanced Micro Devices. The company expected a drop in margins from 63% to 50% in 2001.
11	4141	2005	Chinese buses are competing with US transportation buses. The Chinese buses' price for the trip from Boston to New York – 187 miles in 4.5 hours – was $15. That may seem impossibly low, Greyhound on the Boston to New York run has lately started charging $15 also. Immigrant enterprises are using tactics borrowed from discount airlines and online ticket brokers to compete with Greyhound. Greyhound sued, trying to bump two Chinese lines out of action by charging they weren't licensed properly, and pushed for a federal investigation of a dozen others.
12	4512	2002	AMR corporation, American Airlines cut business fares by 43% in several of its markets and raised leisure fares at the same time. The fares are still higher than discount carrier fares but the gap has been narrowed considerably.
13	4813	1987	AT&T's aggressive pricing has eroded MCI and Sprint's profit margins. AT&T anticipated threat from MCI and Sprint and proactively led prices down to limit their ability to take share. AT&T cost structure can support lower prices better than MCI, Sprint.
14	5411	1994	Vons won on convenience, reliability, but then lost when it failed to match pricing policies of competitors (such as Lucky's). After losing share, Vons promoted its price cuts on 10,000 items (5% price cut). Price cuts expanded to 17,000 items.
15	5411	2002	In recent years, as Wal-Mart Stores Inc. has added groceries to its all-in-one stores, the discounter has made big inroads. Kroger, Safeway, and Food Lion are all cutting costs and lowering prices to lessen Wal-Mart's impact. Wal-Mart has constructed more than 1,000 of its Supercenters and now claims the No. 1 spot in the U.S. grocery market. Counting grocery sales in all its outlets Wal-Mart last year held a 16% share of the market, with an estimated $80 billion in food sales. It is adding another 185 Supercenters this year. Kroger Co. and Safeway Inc. began cutting prices to match Wal-Mart. These price cuts are in turn decreasing their profits
16	5411	2004	HEB competes against Wal-Mart by catering to local tastes. The sprawling gourmet store, with a gargantuan produce department and olive bar featuring more than 30 varieties, now rates as a Texas tourist attraction. The stores are strictly high-end, while the chain's HEB supermarkets and HEB Plus combine low prices on staple items that compete with Wal-Mart and pricier products for customers looking for more selection.
17	5900	2005	HP's online-photo site Snapfish said it is lowering the price for printing a digital photo to 10 cents and 12 cents. That makes Snapfish among the least expensive places to print digital photos. Wal-Mart also lowered its price for a 4-by-6 inch print to 19 cents, from 24 cents. Seiko and other printer makers have cut prices on printers, paper, and ink to stay competitive.
18	6211	2004	To attract more customers, Charles Schwab announced plans to slash prices for some online stock trades. The firm says the move, aimed in part at narrowing the pricing gap between Schwab and discount online brokers Ameritrade Holding and E*Trade Financial Corp will help it attract customers while costing Schwab just 2% to 3% of its revenue over the next year.
19	6211	2005	The latest price reduction actions extend a round of price cutting that began in the fall of 2003 when Fidelity cut commissions for its most active traders to $8. Fidelity has cut commissions by as much as $10 a trade during the past year. Scottrade and TD Waterhouse reduced some of their charges in January of this year. These recent cuts narrowed the differences between firms.
20	6321	2001	Between 1995 and 1997, term life rates fell by as much as 15% as the availability of online comparisons forced insurers to get competitive.

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