Reduce Price to Improve Revenues and Margins




No. SIC Year Notes
1 1750 1998 Sunkist Growers lowered dollar prices on fruit sent to Japan, due to the weakening yen.
2 2082 1991 When price wars intensified again in 1988, AB refrained from getting drawn into the fray and matching prices downward and allowing a temporary umbrella. In the summer in 1989, it realized that its volume growth was not as expected. In Fall of that year it announced that it would match competitors' decreases on a market to market basis even if it did have a negative effect of its returns. As a result of this announcement AB's stock price plunged 10% in one day. AB confirmed that maintaining market share was the key to success in the beer industry.
3 2086 1992 All Sport in 20% of US, PowerAde in four cities and will add Memphis and New Orleans. Gatorade says workplace, schools, restaurants, health clubs and vending machines still unsaturated markets. Quaker cuts prices for Gatorade when has to with competition.
4 3571 2004 Microsoft is offering computers in the developing world at prices far below those charged domestically, signaling an end to global pricing. The company hopes to generate more business in poorer nations and fight open-source system Linux who has success with third-world governments. However, some fear that core business customers will demand the same prices or that cheaper software sold abroad will make its way back.
5 4111 1990 Greyhound has had to respond to deep fare cuts by some airlines. Continental recently slashed its Texas fares to as low as $9 between Dallas and Houston. So earlier this month, Ghound announced new Texas ticket prices that included $5 fare between the 2 cities.
6 4512 2001 Delta Air Lines, in a bid to recapture market share now that its pilot woes are behind it, is taking aim at its hometown discount competitor AirTran Airlines with significantly lower business fares between Atlanta and major cities.
7 4512 2005 Delta's move to slash its most expensive fares and ditch restrictions on inexpensive tickets has prompted rival big airlines to try to limit the matching moves to markets where they faced Delta competition.
8 4512 2006 Substantial fare reductions from major carriers are induced merely by the threat of competing with Southwest. As Southwest's entry into the second endpoint airport got close, prices began to fall rapidly. Incumbent ticket prices upon the entry of Southwest were immediately 26% lower than they were before the threat, and prices had fallen by a total of 32% by the third quarter following entry. The study found that two-thirds of the total fare drop among the incumbents came from the threat of competition rather than actual head-to-head competition.
9 4812 1997 Prices have tumbled wherever PCS companies have entered cellular markets, which have been dominated until recently by just two carriers in each market. In Dallas, for example, AT&T Wireless slashed its prices 25% to compete with a new PCS provider.
10 4841 2003 Cable is fighting the encroaching dish by freezing rates in vulnerable markets, while raising rates sharply in other markets. And they're pushing higher-margin services – especially high-speed Internet access – that satellite can't yet offer.
11 4899 2003 Cable and phone companies operate in different regions and cities. Comcast's service area differs from that of Verizon and BellSouth Corp. The situation lends itself to selective price battles. BellSouth plans to implement more "market-by-market pricing," targeting cities in which cable firms dominate in broadband market share. BellSouth might lower DSL prices in markets such as New Orleans and Charlotte, where cable is strong, while keeping prices steady in Miami and Atlanta. While avoiding price cuts, cable firms Cox Communications Inc. and Charter Communications Inc. have rolled out tiered rate plans. Those services give consumers and home-office users a choice of broadband speeds at different prices.
12 5331 1992 When Wal-Mart moved in on its territory, Family Dollar lowered prices.
13 5942 1986 B.Dalton discounts best sellers 35% in markets where it competes with other bookstores and 25% at other stores. B Dalton's mall locations make it difficult to reduce margins and lower prices because of higher fixed costs. BDalton's earnings growth (5-10%) not profitable enough for Dayton Hudson, but in line with industry averages.
14 5942 2000 There is little to differentiate books so Amazon and had to compete on price, which means online books sell for as much as 30% less than those on store shelves.
15 5943 1997 Staples has a wide gap between prices for pens and paper in cities where it competes with Office Depot and cities where it doesn't.
16 6399 2004 USAA has announced insurance rate cuts this year in 22 states by an average of 5%, including reductions of 9.9% in Illinois and 8% in Oregon.
17 7513 1989 Ryder's commercial and consumer truck leasing lines are experiencing lagging demand and heightened price competition. Margins fell from 6-8% to 2-3% in the first quarter as U-Haul cut prices by 70% in some markets.
18 7513 1991 U-Haul cut prices, gaining market share from Ryder. Ryder plans to fight back with price discounts of up to 30% in some markets.
19 7514 1987 To meet off-airport competition, Budget is now discounting its corporate rates in Florida.
20 7514 1988 Leaders are finally matching/exceeding low price of smaller competitors after losing market share for five years (Hertz share fell from 38% to 32%). Ending Leader's Trap.

<< Return to Choice 3