Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: PRODUCT COST SAVINGS SEGMENT / MANUFACTURING BUSINESS FUNCTIONAL COSTS / SELL COST
CHOICE 3 COMPONENT: CHANGE THE LIST PRICE
| No. | SIC | Year | Notes |
| 1 | 2043 | 1990 | Malt-O-Meal clone cereals are no-frills – no decoder rings inside, few coupons, no TV ads. But Malt-O-Meal saves consumers big money. Its bags – not boxes – are typically priced at about 1/2 of what big brands cost. |
| 2 | 2111 | 1989 | Earlier this year, Brown & Williamson converted full-price Viceroy into a branded generic and more than doubled its market share. |
| 3 | 2111 | 1990 | Liggett jolted the industry by announcing a plan to put some of its cigarettes in black-and-white packs, slap on a generic name, and sell them for 35% less. Very successful. Lower price with new price point |
| 4 | 2111 | 1990 | Smokers tend to buy more of cheaper brands as the overall prices of cigarettes and other consumer items rise. B&W is the tobacco company most dependent on sales of discount brands. B&W brands can cost as little as $1.10 a pack, compared with $2.35 or more for full-priced cigarettes like Marlboros. About 61.5% of generic cigarettes are not generic at all (they're just cheap). About 1/6 packs sold is a low-price brand. B&W's success is built on turning moribund full-price brands like Viceroy and Raleigh into discount lines, and on introducing new discount brands like Richland. The best-selling, indeed the only, new products in the last 2 years have been discount cigarettes. They have had uninterrupted growth for the last 8 years as the price of cigarettes in general has risen steeply. |
| 5 | 2111 | 1992 | The least expensive pack of generic cigarettes, in a black and white package, is 30% less than a pack of Marlboros, which can sell for as much as $2.60. Some other budget cigarettes are 20% less. |
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