Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: PRODUCT COST SAVINGS SEGMENT / DISTRIBUTION BUSINESS FUNCTIONAL COSTS / MULTIPLE FUNCTIONS
CHOICE 3 COMPONENT: CHANGE FUNCTION AND PRICE TOGETHER
| No. | SIC | Year | Notes |
| 1 | 4512 | 2005 | During the airline industry's recession, Jet Blue's 2004 operating revenues reached $1.27 billion, a 26.8% increase over the previous year. Jet Blue achieved their success by cheap seats and a lean value proposition: no meals, no round-trip fares, and no first class seating. However it has added leather seats, high end personal entertainment systems with satellite television, and extra leg room in the back two-thirds of the plane. The company' s action to set itself apart from the high and low ends of the industry and offer features from each has helped them appeal to all types of customers. |
| 2 | 5331 | 2006 | Wal-Mart has recently opened medical clinics in supercenters across the country. Another one of its pamphlet offers a menu of “Stay Well” screenings for basic preventive medicine. For instance: a $29 blood test to determine your cholesterol profile with glucose, vs. what RediClinic claims is a “retail” price of $65. |
| 3 | 5331 | 2006 | Wal-Mart has recently opened medical clinics in supercenters across the country. Its clinics, called RediClinics, have three stark-white rooms staffed by nurse practitioners licensed to prescribe drugs. Receptionists hand out fliers touting a flat $45 fee for “Get Well” visits. That price includes all the tests necessary to diagnose and prescribe for everyday ailments like colds, flu, strep throat, and pink eye. If you're uninsured, as roughly half the clinic's customers are, it's a big saving over the $95 or so that a regular doctor's visit would cost in this part of the country, and a huge savings over the $400 a hospital emergency room might charge. |
| 4 | 5600 | 1990 | Ross sells off-price family apparel at prices averaging 30% to 40% less than department stores. |
| 5 | 5735 | 2005 | RealNetworks has recently introduced a new option for its Rhapsody online music service called Rhapsody To Go, which lets users listen to unlimited amounts of music on portable music players for $14.99 a month. It also plans to keep offering a $9.99 subscription service that limits users to listening to music on their PCs. |
| 6 | 6211 | 2005 | E-Trade launched the latest attack in the online brokerage market's growing price war. Web brokers justify the price cuts by cutting costs and attracting more customers from high-priced offline rivals. Scottrade also slashed prices to $7 a trade and Ameritrade announced a bare bones service that halved its regular fee to $5. |
| 7 | 6531 | 2005 | New companies have formed to help home sellers avoid the high fees of traditional real estate agents. Some companies offer a fee for service menu which allows clients to select the services they want. While this means more work for customers, it can often be a substantial reduction in costs. Realty Information Systems, which works under the name Help-U-Sell Real Estate, charges a flat fee of around $2,950 to advertise the home for sale in the newspaper, provides a web site listing, and advice on the offering price and negotiations. |
| 8 | 7375 | 1991 | Zapnews electronically sends out 90-second news summaries, rewritten from news wires like Reuters. Stations order from a menu and pay only for what they get, so it's cheaper than companies who charge for a steady stream of news. |
| 9 | 7832 | 1992 | Mitchell built more dollar houses and now owns 358 screens in multiplexes across the US. He puts the theaters in lower-rent districts and in the less-expensive suburban malls. The cheap tickets attract plenty of customers, many of whom buy high-margin soft drinks, popcorn, and candy- the combination of which creates a healthy bottom line. |
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