Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: INDIVIDUAL CUSTOMER SEGMENT / OTHER TYPES OF INDIVIDUAL CUSTOMER
CHOICE 3 COMPONENT: SET A PRICE CAP
| No. | SIC | Year | Notes |
| 1 | 1629 | 2005 | In an industry where bidding on large-scale construction projects is typically on a cost-reimbursable basis-where contractors set their profit margin as a percentage of the project's overall costs-Chicago Bridge & Ironworks stands out. Before taking on a project, it sets a firm price for its customers. Their incentive: the tighter their grip on costs, the greater their profit margin. |
| 2 | 7375 | 2006 | Google auctions off ad space by charging the highest bidder only the amount necessary to win the auction. This amounts to the second-highest bid plus a penny. This reduces the winner's curse, in which the winner of the auction feels overcharged or regrets his bid. |
<< Return to Choice 3