Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: RETAIN CUSTOMERS

CHOICE 2 SEGMENTS: TARGETED COMPETITOR SEGMENT / STANDARD LEADER PRICE AGAINST ESTABLISHED STANDARD LEADER / AGAINST A TOP TIER STANDARD LEADER

CHOICE 3 COMPONENT: PRODUCT BASED LIST PRICE CHANGE – MAIN PRODUCT

No.	SIC	Year	Notes
1	2000	1990	Hershey hasn't raised the price of its chocolate bars since 01/86.
2	2000	1993	Wrigley and Warner-Lambert held prices down; a five-stick pack of Wrigley's gum still goes for a quarter, the same as in 1987.
3	2000	1993	Frito-Lay's mkt. share declined 2% since 1988, following 3% average annual price hikes. Starting in late 1990, it cut prices as much as 15% and improved product quality. The result: last year, its snacks picked up 1.2 points of share, to 40%.
4	2043	1996	Kellogg has been reducing prices on a product-by-product basis. For instance, in January, it cut the wholesale price of Low-Fat Granola by 8.7%. And this month, it lowered the wholesale price of Kellogg's Raisin Bran by 15%.
5	2086	1988	Prices have fallen 3.5% on Coke products in one year due to price wars w/ Pepsi.
6	2095	1995	When Maxwell House cut its prices by 30 cents a can in Jan., Folgers followed w/ a similar cut.
7	2600	1996	Kimberly-Clark said yesterday it will cut US prices for its tissues, paper towels, and bath tissue. Some Kleenex products will be cut an average of 8.5%. Kleenex Viva and Scott Clean paper towels will be lowered by less than 5%. The company is following the lead of P&G.
8	2800	2004	Procter & Gamble's most recent challenge to Unilever in the developing world had only limited success. In 1999, it launched a costly price war and marketing push in Chile, Argentina and Brazil, markets where Unilever had shares of up to 90%. Declaring a goal of capturing about 30% of the market in the three-country region, P&G slashed prices by up to 30% and launched six brands in two years. Unilever cut deeply into its costs there, raising gross margins for its Latin American detergent business by eight percentage points from 1999 to 2003. That enabled it to absorb the price cuts and invest in product innovations. While P&G did gain some market share, Unilever says its slice now stands at between 70% to 80% in those markets.
9	3600	2005	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.
10	3661	1996	Last fall, Motorola trimmed $15 off the wholesale price of its Teletac cellular phone after NEC cut the price of a similar product in its own line. "We are not going to let people take business away from us."
11	3661	2005	Color screens, cameras, and clamshells. Those features helped drive the cell phone industry to another record year in 2004. But the industry's growth rate will slow this year, thrusting cell phone makers into even deeper competition. Four cell phone companies–Motorola, Samsung, LG, and Sony–outpaced the rest of the market. Motorola, the No. 2 in the industry, got a boost from the release of its V3 Razr phone, an ultra thin $400 phone. No. 3 Samsung also managed to outpace the market due its color-screen, clamshell phones equipped with cameras. Samsung also got a boost from price cuts, which it made to match those offered by No. 1 phone maker Nokia.
12	3711	1996	In August, GM's Cadillac division reduced 1997 model prices only days after Ford's Lincoln division set a one-price policy for its 3-car lineup, cutting prices on 2 models.
13	4512	1993	American responded to Northwest by essentially offering 50% discounts to all leisure passengers in US markets.
14	4899	2004	AT&T and Internet telephone provider Vonage are cutting prices for their residential Internet calling services by $5 per month, this is the strongest sign yet of a price war in the nascent market.
15	5311	1989	After Sears introduced everyday low pricing in Wichita, one Kmart supervisor said "We were told to drop our prices to match Sears' prices."
16	5411	1994	After losing share (12% drop in sales since 1992) Vons aggressively promoted price cuts on 10,000 items. (roughly 1/3 of items cut average of 5%).
17	5812	2009	Starbucks Corp. said it is ready to fight back against rivals' claims that the company's coffee drinks are expensive and the notion it is losing share to cheaper coffee makers. As it reported a 77% drop in quarterly profit, the company also said it will adjust its pricing in some markets, raising prices of some of the more complicated drinks while lowering those on basic drinks. For example, Starbucks will offer a "grande" size iced coffee for less than $2, shaving as much as 45 cents off the price, depending on the market.
18	6211	1997	The new executive keeps an intense focus on rivals. The "Competition Room" near his corner office keeps market analysis on Vanguard Group, Schwab and Merrill Lynch & Co. New products and pricing have taken direct aim at rivals by: 1) lowering fees on two big Fidelity index funds to bring them in line with 0.20% charged by Vanguard 2) establishing a flat $28.95 fee for on-line trades up to 1,000 shares, undercutting Schwab's $29.95 charge 3) placing a selection tool on web site helping investors zero in on fund choices based on risk tolerance and investment style similar to Schwab.
19	6211	1998	DLJ’s Pershing division had largely created the online brokerage industry. Still, as online brokerage took hold with the Web, the aggressive marketing campaigns and deeply discounted trades of companies like E*Trade, AmeriTrade, Datek and Charles Schwab quickly made them high profile competitors. Most of these companies had dropped their commissions to $30 per trade by 1997. PCFN held to a $60 price point and lost share despite superior graphic interfaces and cutting edge technology. The company reduced its commission rates to $20 a trade in 1997. The price cut resulted in a temporary revenue slippage in 1997 but by 1998 DLJdirect's commission revenues had increased by 55% over 1997. Active accounts had grown by 46% and total transaction volumes had risen by 84%.
20	6211	2005	Since 2004, Schwab has repeatedly lowered its prices on stock and option trades to bring its fees closer to the rest of the industry.

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