Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: LOSS LEADER SEGMENT / A SINGLE-YEAR ROUND PRODUCT
CHOICE 3 COMPONENT: PROVIDE A SAMPLE OF THE PRODUCT
| No. | SIC | Year | Notes |
| 1 | 7299 | 2009 | Nirmada Interior design has noticed that fewer of her upscale customers are willing to pay $200,000 to 2 million for her company to design a room or two in their home or office. To accommodate would-be customers who aren't ready to spend big yet, the company recently began offering four-hour design consultation for $650. While that's enough for some, most clients end up going for the full package. Such unbundling might even improve profits. A business using this strategy must be very clear about what it is offering and the price. If customers are choosing the less-expensive, slimmed-down route, they have to understand that the quality of the service they receive won't be as high as normal offerings. |
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