Final Customer Purchasing from the Product Producer

Acquire Steps: Acquire steps include all activities the customer completes preceding the use or the consumption of the product. These steps include the customer's efforts needed for evaluation and acquisition of the product.

Resources: Reduce resources required for the use of the product

Money – Reduce the money the customer uses with the product. For more ideas on using pricing, please see the Improve/Pricing section of StrategyStreet.

A. Reduce the level of payment for use of the product

Reduce price for a comparable product

Lead prices down

No. Year SIC Note
1 2003 2084 The first price of Kendall Jackson wines in 1982 vintage's Vintner's Reserve Chardonnay placed in the mass prestige market segment was $5 a bottle. Well below the $10 plus price of the today's boutique wines, the price was only $2 above economy wines.
2 1996 2840 P&G is eliminating coupons and lowering prices of its products across the board. Over the past few years, it has cut its US coupon spending by 50%. It has reduced list prices 0.5% a year for each of the past five years.
3 2001 3571 Compaq's iPaq Pocket PC has become a huge success, stealing market share from rival Palm. One key to this success is that, while Palm requires that special applications be installed separately, and were until recently, sold separately, iPaq comes equipped with all the necessary tools. Big companies are more likely to invest in the iPaq's because they require less tech support and training.
4 2004 3571 Hewlett-Packard is taking on Dell for the No. 1 spot in the personal computer industry. Their new strategy is to sell PCs without worrying about profits. They push high-margin peripherals, consulting and consumer electronics. After acquiring Compaq in 2002, H-P can cut prices further because of its massive size. The cost-cutting tactics are ideal for consumers as prices on desktops and laptops continue to fall. H-P offers a broader line of goods and services than Dell, leaving it with more leeway in profit margins. The size also allows the company additional clout when negotiating with contract manufacturers.
5 2004 3571 The largest personal computer maker, Dell Inc. reported their third quarter profit jumped 25% as its U.S. business customers boosted spending on PCs. Dell's profits were buoyed by accelerating declines in component costs that helped increase customer demand. Total shipments rose 22% exceeding the company's own forecast. Revenue climbed 18% to $12.5 billion from $10.62 billion a year earlier. Dell's aggressive push to pass along lower component costs helped spur demand, especially in notebook PCs where shipments increased 35%.
6 2001 3571 Dell jumped into the low-end server business five years ago. It's No.1 in the US market. "This is the first company I've been at where commoditization is a strategy."
7 2005 3600 Nokia, No. 1 in the cell phone manufacturing industry, managed to end the year with 30% of the overall cell phone market. Its price cuts helped the company stem the market share losses.
8 1988 3600 Tandy is putting the finishing touches on a Virginia factory that will make 5000 speakers a day for sale by foreign makers in the U.S.
9 2004 3651 TiVo was developed in 1997, allowing viewers to pause live programs and record on disc. The market quickly became fraught to competitors. Today, TiVo's overall DVR share is about a third of the market and shrinking as the market has been flooded by cheaper, more efficiently distributed products, including a set-top cable box by Scientific-Atlantic. Often, cable companies like Time Warner Cable are distributing the boxes to customers free in return for a monthly service charge that ranges from $5 to $9. Buying a TiVo at retail costs a minimum of $199 with a $13 a monthly programming fee.
10 2003 3651 Dell's response to the iPod is a handsome silver and black unit with simple, easily understood buttons and a barrel-shaped scrolling device for navigating long song lists. The Dell DJ comes in two models, which vary only by the capacity of their hard disks. A 15-gigabyte model, which can hold over 3,700 songs, costs $249, or $50 less than Apple's 10-gigabyte iPod. A 20-gigabyte model, costs $329 versus $399 for Apple's 20-gigabyte iPod. Sturdy rubber feet and a rubberized material on the edges give the Dell a solid, high-quality feel. The Dell is also much bigger than the iPod. Some of that extra bulk is used to house a larger battery than Apple's. The Dell claims up to 16 hours of play time on a charge, which is double the iPod's eight hours. It also can record voice memos.
11 N/A 3661 Brother Industries believed it could become successful in the fax machine industry if it could offer a product that was lower priced than rivals. Engineers were ordered to come up with a machine that cost just $399, about $100 less than rival offerings. The new machine, called Fax-600, was a hit in the U.S.
12 2005 3663 Dell's low cost structure, peerless supply chain, and direct-sales model lets it drastically undercut rivals' prices. It recently introduced high-definition 42-inch plasma sets for less than $3,000, with incentives, while Sony and others were selling similar models for more than $4,000. In a matter of months, Dell seized 10% of this important slice of the plasma market in the U.S.
13 2004 4813 Phone companies are scrambling to avoid the pressure caused by Internet calling service providers. AT&T is retreating from the traditional consumer phone business. Other phone companies are trying to copy the services offered by newcomers. The regional Bells used to think that they had the surefire advantage of direct lines into America's homes and offices. Now, new technology is hurting the value of that network. And the trend is worsening as cable companies rush to enter the business.
14 1999 4813 Amid the bewildering array of choices, backers of Broadband Office say they will appeal to tenants on simplicity, convenience and cost. They'll offer a single contract for local phone service, long-distance, and data connections. Broadband Office plans to spend as much as $100 million during the next 12 months to install fiber-optic and other high-speed lines through its owners' buildings. The plan is to undercut prices the Bells typically charge, which can approach $1,000 a month for a single high-speed data line. Broadband says new users will have to wait a matter of days, not weeks, to get its service.
15 2003 5945 FAO Schwarz lost charm as it expanded and as department stores and mass merchandisers competed by carrying the same merchandise. FAO Schwarz did not do anything to make themselves special or stand out in the industry, Wal-Mart and Toys 'R' Us are cheaper and their selection may be better.
16 2002 7372 An effective neutralization strategy is to give away the benefits offered by a challenger for free. When Microsoft developed the Internet Explorer browser in 1995, for instance, users got it as part of Windows at no extra charge.

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