Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: LOSS LEADER SEGMENT
CHOICE 3 COMPONENT: PROVIDE A SAMPLE OF THE PRODUCT
| No. | SIC | Year | Notes |
| 1 | 4513 | 2009 | FedEx Office summoned job hunters to run off their résumés free of charge at more than 1,600 locations on Mar. 10, its first nationwide free print program. Nearly 24,000 people showed up and printed more than 853,000 copies. At roughly 20 cents a page, the giveaway amounted to some $200,000 in foregone revenue. The company says it might repeat the exercise. |
| 2 | 5331 | 2004 | Taobao Chinese online trading site doesn't charge users, and promises to remain free for the next three years. |
| 3 | 5735 | 2005 | RealNetworks has aggressively discounted music in the past to attract more customers to its online music services. Now it is going one better, by letting users listen to more than two dozen songs a month for free out of an online catalog of more than a million tracks. The company intends to use Rhapsody25, as it calls the offer, to help attract people to separate paid services that offer unlimited access to a vast catalog of music for a monthly subscription fee. |
| 4 | 6021 | 2003 | Washington Mutual allows other banks' customers to use its ATM machines without paying the customary $1.50 surcharge. But other fees still apply. Washington Mutual still charges its own customers $1.50 for using another bank's ATM. |
| 5 | 7299 | 2009 | Nirmada Interior design has noticed that fewer of her upscale customers are willing to pay $200,000 to 2 million for her company to design a room or two in their home or office. To accommodate would-be customers who aren't ready to spend big yet, the company recently began offering four-hour design consultation for $650. While that's enough for some, most clients end up going for the full package. Such unbundling might even improve profits. A business using this strategy must be very clear about what it is offering and the price. If customers are choosing the less-expensive, slimmed-down route, they have to understand that the quality of the service they receive won't be as high as normal offerings. |
| 6 | 7372 | 2005 | There are a total of 19 web based versions of federal tax prep and electronic filing programs available free through the IRS. Some of the sellers participating include Intuit Inc. maker of TurboTax and H&R Block maker of Tax Cut. All the free offers are for federal returns. |
| 7 | 8721 | 1990 | Price Waterhouse practically giving away auditing services worth as much as $25,000. In one recent case, it even agreed to do an audit free of charge. |
<< Return to Choice 3