Raise Price to Improve Revenues and Margins
CHOICE 3: USE THE COMPONENTS OF PRICE TO FURTHER CONTROL THE EXTENT OF THE HIGHER PRICE
D. Change the Optional Components of Price:
Shorten the normal payment term
| No. | SIC | Year | Notes |
| 1 | 2273 | 1996 | Price-based advantages do not exist in this market. Any advantage one supplier may try to gain over another will quickly be matched and passed on to other customers. Shaw led the tightening terms, and largely succeeded because customers had no one else to turn to. In this case, all of Shaw's competitors matched Shaw in what could have been a very damaging failure. |
| 2 | 6141 | 1997 | Revenues are under pressure from increased competition. Issuers have been resorting to massive discounting in net interest margins, primarily through introductory ("teaser") rates that in some cases are now as low as 0 percent. Meanwhile, annual fees have fallen by roughly 60 percent since 1991 to less than $4.30 per account. Issuers have tried to compensate with such hidden charges as higher penalties for late payments and reduced grace periods before which interest starts accruing, these have gone only part of the way. |
| 3 | 6141 | 2009 | With the economy contracting and fears rising about credit-card delinquencies, banks are trying to cut costs and bolster profits. Many card issuers have been testing shorter expiration periods, higher redemption fees or earnings caps on rewards. |
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