Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS

CHOICE 2 ISOLATE SEGMENTS: INDIVIDUAL CUSTOMER SEGMENT

CHOICE 3 COMPONENT: CHANGE THE LIST PRICE

No.	SIC	Year	Notes
1	2834	1991	Government and private health groups have negotiated discounts of 25-60%+ off usual wholesale prices.
2	3523	1993	The industry's largest customer receives up to 6% discounts.
3	3571	1989	IBM has started a price war on mainframes. Survey shows that nearly 1/3 of a large group of IBM customers got a 15-25% discount on their mainframes. Another group, 1/3+ of those surveyed, got discounts higher than 25%.
4	3571	2005	After a disappointing holiday turnout last year, Hewlett-Packard worked closely with Wal-Mart for the next 12 months to ensure this year's strong holiday sales. The resulting strategy is a big emphasis on technology products at Wal-Mart now aimed at fueling the end-of-year shopping frenzy and whetting consumers' appetites for other goods inside Wal-Mart stores. The two cooked up such holiday specials as a desktop computer and 15-inch monitor for just $398, a laptop computer for $398, and a printer that can also copy, fax and scan for $48.88.
5	3572	1992	Conner gives its largest customer, Compaq, the lowest prices. Conner recognizes the need to generate long term business with a Very Large customer.
6	4512	1994	American Airlines uses computers to help set prices, so that it can give a range of prices on each flight and fill its planes. Ex: offers $129.83 tickets for senior citizens and government and military employees.
7	4512	2002	Delta Airlines has cut business fares over the last 8 eight weeks by over 20% in more than 400 small markets. This fare cut produced double digit increases in revenues. Other competitors have followed Delta's moves.
8	4813	2004	Lower prices in the telecommunications industry are enticing many consumers to spend more. A proliferation of alternatives and new technologies is forcing phone companies to keep competing on price. The big long-distance carriers have for years used price as a key weapon in the battle of elite contracts with government and big businesses.
9	5511	2007	Haggling over prices has become widely unappealing. 65% of car buyers say they'd rather not haggle. Women are particularly adverse to the tactics.
10	5734	1993	As price wars were breaking out between Microsoft, Lotus and Borland, profit margins on software collapsed and Egghead suffered. At the same time, though, Software Spectrum Inc. and Corporate Software Inc. each grew by more than 30% in 1992 by giving big discounts to corporate buyers.
11	5900	2003	In the world of online goods and services, customers can be divided into segments in accordance with their needs and resources. This offers a unique opportunity for pricing segmentation. One company discovered that a small reduction in the price of high-end merchandise brought in more sales from educational institutions. To retain margins and these customers, the company created a special website with special pricing for educational institutions.
12	5961	1998	Traditionally, the salesmen in Premier Farnell's 80 sales offices have discounted products, sometimes considerably, to bring them to a commercial level. Now a rational discounting policy has been implemented where the majority of products are shown at a market price, with the opportunity for salesmen to discount by a maximum of 10% if the volumes are sufficient, and the customers are eligible. Large, centrally managed orders are still quoted individually.
13	6141	2008	In recent years, credit-card issuers have built more flexibility into their reward cards as a way to build consumer loyalty. Chase, for example, has long boasted its Freedom card gives consumers the flexibility to switch between cash back and reward points, while offering up to 15 everyday spending categories where they could earn up to 3% cash back all the time.
14	6531	1990	Many real estate brokers have grown accustomed to shaving a point or so off their commissions to satisfy hard-bargaining buyers.
15	6531	2005	As home prices surge, sellers have more leverage with traditional real estate agents. Often, they can negotiate a small reduction on the typical 6%.
16	6552	2008	With the condo glut growing as new towers are finished, and buyers walk away from presale contracts, developers increasingly are resorting to auctions to unload units at steep discounts. Unlike ubiquitous foreclosed home auctions, these events seek to establish market prices for untainted, even upscale properties. In a test of the strategy, 39 luxury coastal condominiums went under the hammer late August at about half their previous asking prices. Thirty three of the 39 condos sold on auction day, including a three-bedroom, 1,651-square-foot unit that went for $995,000, well above the minimum bid, but well below the original list price of 1.5 million.
17	7300	2009	Geary Interactive Inc. reduced its hourly fees to $80 from $100 to $135 in response to customers desires for lower rates. However, Geary added a contractual bonus to be paid at the end of a certain time period if its marketing campaigns met or exceeded a client's goals. The move also meant a shift for staff often accustomed to thinking about loner-term goals such as brand development; now, there is a higher sense of urgency.
18	7514	1989	Rental rates for corporate customers negotiating new contracts are about the same as a year ago. The biggest customers are getting the lowest rates.
19	8221	1996	This year North Carolina Wesleyan cut tuition for incoming students 23%. Also Univ of Rochester, Pine Manor, Waldorf College, Muskingum College.
20	9100	2003	The U.S. Postal Service will offer special discounts to its heaviest users of first-class mail. Capital One Financial will receive discounts up to 6 cents a piece over the next three years. This promotion may open up a new revenue source for the USPS which has been struggling with a sluggish economy and the popularity of e-mail.

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