Reduce Price to Improve Revenues and Margins

CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS

CHOICE 2 SEGMENTS: INDIVIDUAL CUSTOMER SEGMENT / OTHER TYPES OF INDIVIDUAL CUSTOMER

CHOICE 3 COMPONENT: SET A PRICE CAP

No. SIC Year Notes
1 1629 2005 In an industry where bidding on large-scale construction projects is typically on a cost-reimbursable basis-where contractors set their profit margin as a percentage of the project's overall costs-Chicago Bridge & Ironworks stands out. Before taking on a project, it sets a firm price for its customers. Their incentive: the tighter their grip on costs, the greater their profit margin.
2 7375 2006 Google auctions off ad space by charging the highest bidder only the amount necessary to win the auction. This amounts to the second-highest bid plus a penny. This reduces the winner's curse, in which the winner of the auction feels overcharged or regrets his bid.

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