Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: TARGETED COMPETITOR SEGMENT
CHOICE 3 COMPONENT: PROVIDE A FREE, OR HEAVILY DISCOUNTED, PRODUCT FROM THE COMPANY, OTHER THAN THE PRODUCT ON SALE
| No. | SIC | Year | Notes |
| 1 | 4841 | 1997 | Completing the hat trick, Cox launched its first residential cable telephony service, called Cox Digital Telephone, in mid-September in Orange County. Pricing for this service is also compelling: the first line is priced at $9.99 versus PacBell's $11.25, advanced features are 28% lower, and, at least initially, installation is free. |
| 2 | 7372 | 1995 | 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. |
| 3 | 7372 | 1995 | Like its new competitors, Microsoft is giving away software to get a position in the Web market. It's giving away its Internet Assistant–available on Microsoft's web site. |
| 4 | 7372 | 2005 | Netscape's browser, which cost each user $39.95, would enable applications like word processors and spreadsheets to reside on centralized internet servers rather than on the hard drives of users' desktops. That in turn would lessen their need for Windows or Office, sapping Microsoft's business. But the CEO rallied Microsoft to develop its own browser, which it then bundled free with Windows. Netscape's market share collapsed. |
<< Return to Choice 3