Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: PERFORMANCE PERCEPTION SEGMENT / UNPOPULAR PRODUCTS
CHOICE 3 COMPONENT: CHANGE THE LIST PRICE
| No. | SIC | Year | Notes |
| 1 | 2300 | 2001 | Eileen Fisher has asked her staff to consider a new model: renting department store space in order to control prices and inventory. The rift between department stores and many brands after decades of close cooperation could mean that shoppers will see fewer of those deep, early luxury-brand discounts that they have enjoyed for the past year. Luxury brands want to control when they take discounts and on which products. Eileen Fisher is encouraging department stores to use what she calls "scalpel markdowns"—where items that sell poorly are marked down quickly, leaving strong sellers at full price even as new inventory arrives. |
| 2 | 3572 | 1999 | When IBM stopped buying from Seagate in 1984, Seagate cut prices by 35%. |
| 3 | 3630 | 1988 | Philips is offering discounts on appliances, knocking 12% off a $53 coffee maker. |
| 4 | 3711 | 1985 | General Motors is leaning away from high-profile national discount programs in favor of regional targeted deals in an effort to dampen consumer expectations of big price cuts. While discounts are still deep, they vary by region and are targeted at certain models, especially those who have poor performance. |
| 5 | 3711 | 1991 | Audi is now offering discounts of up to $2,000 on its Audi 100 and 200 front-wheel-drive models, after sales plummeted 60% last month. |
| 6 | 4813 | 1988 | The idea of a hand-held phone that people can take anywhere sounds great in concept. But demand can be fickle. In June, Iridium lowered prices by as much as 65%. Most calls now cost $1.50 to $3 per minute. With special retail deals, phone prices should fall to less than $1,000. Lighter, cheaper phones could ship in early 2000. |
| 7 | 5331 | 1992 | ShopKo exercised restraint in the spring of 2001 when its new nylon track pants were not selling. Before, the company had resorted to small price cuts followed by monthly cuts until the product sold. Instead, it dropped the prices from $10.79 in early May to $9.75 in June. The pants sold out during the discount period without more dramatic price cuts. |
| 8 | 5712 | 2003 | In the past year, Bombay cut prices to clean out slow-moving inventory. |
| 9 | 7372 | 2009 | Weaker companies find themselves more vulnerable to the pricing pressures in the tech industry. Novell Inc. recently advertised a 50% cut in prices for one of its top products. Large corporations can also exploit this weakness and demand further price cuts or lowered maintenance fees. |
| 10 | 7374 | 2008 | Priceline.com boasts a revolutionary "name your own price" concept of bidding sight-unseen for hotels, airline tickets, and rental cars (launched in 1998). The core of Priceline's US business remains its "opaque" inventory of chain lodgings whose identities and exact locations aren't revealed to customers until they've committed to a non-refundable purchase that includes taxes and Priceline fee. Hotels set their own "distressed inventory" rates for Priceline, which vary by demand. A possible recession encourages bargain-conscious US travelers to trade choice and flexibility for discounts (usually 30% to 60%). However, bidding requires specific consumer skills. One is "Be A Shrewd Shopper:" check the lowest published rates at hotel websites or an aggregator item such as Kayak.com for properties with similar characteristics. |
| 11 | 7375 | 2005 | AOL is introducing pay-per-call ads. With them, advertisers only pay if a consumer dials an 800 number that appears with the spot. This differs from traditional approaches, in which advertisers pay if consumers click on their ads. Bidding starts at $2 per call. |
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