Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: TARGETED COMPETITOR SEGMENT
CHOICE 3 COMPONENT: SET A PRICE CAP
| No. | SIC | Year | Notes |
| 1 | 2834 | 2009 | Even as U.S. lawmakers seek new ways to rein in health-care spending, drug companies are quietly getting around these actions using a device for controlling prescription-drug costs: insurance co-payments. Drug makers are increasingly subsidizing these "co-pays" — the share of prescription costs that insured patients must pay out of their own pocket. Insurers require co-pays to give patients an incentive to be price-sensitive and pick generic drugs over pricier name brands. British drug maker AstraZeneca PLC's program for Nexium will pay a patient's out-of-pocket costs for the heartburn drug beyond $25 and up to $75 a month. To get the discount, patients simply hand to their pharmacist a rebate card, which they can obtain through their doctor, or by calling the company or just by printing one from the drug's Web site. |
| 2 | 4512 | 2005 | Delta announced plans that would cap one-way coach airfares in the continental U.S. at $499 and one-way prices in first class at $599. Frequent fliers worry that the small difference between coach and first-class tickets will make it difficult to obtain free upgrades. America West announced similar changes in 2004 and has seen only slight drops in upgrades for frequent fliers because it has higher cost differentiation on certain routes. |
| 3 | 6211 | 2007 | Hedge fund fees usually include an annual management fee and 20% on any profits. The fund is allowed to keep performance fees even when they later lose money for their investors. With this pricing structure, the interests of clients and money managers are at odds. Some companies are working to remedy this problem and in return encourage loyalty. Orbis Investment has shifted their income, Orbis puts the money into a reserve account. If the fund later underperforms, this money is used to pay back clients. |
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