Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: REWARD CUSTOMERS

CHOICE 2 ISOLATE SEGMENTS: LOSS LEADER SEGMENT

CHOICE 3 COMPONENT: CHANGE THE BASIS OF CHARGE

No. SIC Year Notes
1 3571 2001 Gateway lopped $100 off the price of its Connected Touch Pad with Instant AOL, making it $499. (Gateway also shelved plans to develop a wireless Web pad for the home.) Compaq tossed in an extra $100 rebate for its iPAQ Home Internet Appliance with MSN. Both offer $400 rebates to people who agree to pay $21.95 a month for 36 months of Internet service. Will consumer bite at $500 in rebates on a $499 appliance?

<< Return to Choice 3