Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS

CHOICE 2 SEGMENTS: PRODUCT SYSTEM COMPONENT SEGMENT / COSTS OF SUPPLIES THE CUSTOMER USES WITH THE PRODUCT

CHOICE 3 COMPONENT: PROVIDE A FREE OR HEAVILY DISCOUNTED PRODUCT FROM A THIRD PARTY

No.	SIC	Year	Notes
1	3087	1992	Since Wal-Mart avoids price promotions, Rubbermaid attracts shoppers by adding something extra, such as packaging free Kool-Aid or Tang with its plastic pitchers.
2	3571	2001	Just last summer computer makers were boosting already strong sales by hawking sleek new hardware designs and faster processors. Today, the PC business is showing all the signs of brutal price war: rapid price cuts, rebates and lots of freebies. Dell Computer Corp., which launched the current price battle at the end of last year, is tossing in free delivery, a free printer and free Internet access to customers who buy a PC through its Web site.
3	3571	2001	Today's aggressive promotions and price cuts – $400 instant rebates, free shipping, free printers and free Internet access abound – come after steady long-term price drops, in part because of cheaper components.
4	3674	1999	Micron is offering a "free" PC and monitor. Simply subscribe to 3 years of their service package (prepayment of $1087) and the PC is free. You will receive a new, free PC every 3 years when you renew your subscription. You also receive 3 years internet access, a 3-year warranty, telephone tech support, and a 3-year membership to e-additions@Club.
5	3695	2005	TiVo became popular at its debut, gaining 2.3 million subscribers. However, TiVo's main outlet as been DirecTV, which last month announced plans to begin using a competing DVR service. TiVo's deal with Comcast fell through last summer, which is unfortunate because competition is cut-throat. DirecTV is offering new customers a free DVR with a $5 monthly fee. Companies like Microsoft and HP are promoting new computers that include DVR functions without TiVo's $12.95 monthly fee.
6	3711	1988	GM's Oldsmobile recently began offering a free year's supply of gasoline to Cutlass Supreme buyers in the East.
7	3711	2006	As gas prices rose, General Motors offered Midwestern car buyers $1000 of free fuel on vehicles that use E85, an ethanol and gasoline blend.
8	3716	2002	One of Monaco Coach's strategies is its focus on quality and not on the price. They focused on the products which allowed them to avoid having to give as much discount. In response to the industry's recession, Monaco increased is rollouts of new models and floor plans. They came up with new promotions to help dealers move vehicles. When higher gas prices made customers balk, the corporation fronted $1,000 worth of free gas as part of the deal.
9	4512	1986	Two people traveling together to Europe on Pan Am by July 15 also are getting a free rental car for a week. TWA matched the offer for full-fare customers and threw in a week's hotel stay in Europe.
10	4812	1996	Fast growing (30-50%/yr), although demand has slowed in US, and host of new competition in cellular due to deregulation. Big providers practically giving away phones to sign up service. Avg wholesale price of phone product has fallen from $518 to $136 in 5 yrs. Nokia does not pioneer technology, the company "just tries to give the customer what they want" like Dallas Cowboy phones & designer phone accessories in neon colors. Saves $ on R&D.
11	4812	2003	The difference in price in cell phones can be dramatic. Phones cost anywhere from $20 to $400. Often, phones are free to consumers when they sign up for a cell phone service plan.
12	7011	1990	Campton Place and other hotels also are throwing in baskets of fruit, champagne and other goodies to attract customers.
13	7514	2008	Hoping to keep wallet-conscious road trippers behind the wheel, car-rental agencies are offering a series of gas discounts that allow customers to snag a tank for well below the national average of $3.94 a gallon. Many Hertz locations are offering one free tank of gas. AAA members can even claim the deal in conjunction with their regular club discount.

<< Return to Choice 3