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: OFFER A COUPON
| No. | SIC | Year | Notes |
| 1 | 2043 | 1990 | Because ingredients typically represent only about 10% of a cereal's retail price, without heavy advertising, superstar endorses, or fancy packaging, Malt-O-Meal can offer grocers margins of 15 to 20% – compared to 12% they get for big brand names. |
| 2 | 2111 | 1993 | Philip Morris, Reynolds and most other makers of high-priced cigarettes also sell discount brands, either under retailers' labels or as generic brands. From 1 percent of cigarette sales in 1982, these products have grown to about 36%. Tobacco companies maintain that their premium cigarettes have premium ingredients. Philip Morris now has 2 tiers of prices, with premium brands at $1.80/pk and cheaper ones at $1.25/pk. |
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