Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: REWARD CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: COMPANY REVENUE IMPROVEMENT SEGMENT
CHOICE 3 COMPONENT: WAIVE, OR MAKE A ONE TIME OR PERIODIC PAYMENT, TO COVER SOME COSTS OF THE CUSTOMER
| No. | SIC | Year | Notes |
| 1 | 2030 | 1992 | Heinz is putting an extra $100 million into trade spending, the fees and discounts it gives to retailers, while its advertising declined over 40% from 1990 to an estimated $78.5 million. |
| 2 | 2082 | 2008 | Acknowledging shifts in beer preferences by US consumers, Anheuser-Busch Cos. is relaxing a policy that deters many of its distributors from carrying rival brands. The company said it would let certain distributors hawk a small percentage of competing products and still pay those distributors financial incentives for carrying Anheuser's brews. This is a change from a "100% Share of Mind" campaign, which provided a payment of two cents per case of beer if distributors jettisoned competing products. The brewer's decision was necessary to address concerns from distributors, who face increasing financial challenges. |
| 3 | 2084 | 2001 | A decade ago wineries increased prices by 10% or so because then the wine was under-priced and half of the wineries were losing money. Now customers no longer want to pay the high prices forcing wineries to lower prices. Rather than simply cut their prices, wineries prefer to offer temporary sales incentives in the form of special credits and cash-back allowances to wholesalers and retailers that move more of their product. |
| 4 | 2086 | 1997 | Coke is offering unusually hefty financial incentives to win prime display space in convenience stores. |
| 5 | 2111 | 1998 | Under the rules of Retail Masters, Philip Morris's sales incentive program, displays for non-Philip Morris brands must be "temporary" — often only a few days. |
| 6 | 2111 | 1998 | To earn more Flex Funds from Philip Morris, retailers offer smokers of RJR's Winstons a free Marlboro cigarette and suggest they consider switching. |
| 7 | 2111 | 2005 | Marlboro's viral marketing campaign aimed at a community of its customers keeps smokers loyal, but gaining new customers through in-store promotions, price cuts, and other deals is equally important. Marlboro is winning that game too. For instance, one Texas convenience store owner stated that he pays $5.50 less for a carton of Marlboros than a carton of Camels. He has agreed to a deal that gives Philip Morris 66% of his cigarette shelf space and, he estimates, about 80% of the tobacco display at his local Wal-Mart is also Philip Morris. Not only is Marlboro the dominant brand, but Philip Morris also offers him a better deal than competitors, including R.J. Reynolds. |
| 8 | 3571 | 1989 | For months, IBM has pushed microchannel machines by offering fat incentives to its retailers. |
| 9 | 3652 | 2004 | Since the introduction of JumpStart, Universal competitors have roughly doubled the size of their discounting programs, including co-op and product-placement payments. |
| 10 | 3652 | 2004 | Universal also stopped giving music retailers so-called co-op advertising payments. The money is supposed to be used by retailers to buy local advertising highlighting the label's current titles – but in practice, co-op money is viewed by many in the industry as a subsidy to keep struggling retailers out of the red. |
| 11 | 3663 | 1988 | Phone carriers are giving retailers commissions of up to $200 for every phone sold. Phones may be cheap to buy, but have hefty usage fees. |
| 12 | 3674 | 2005 | AMD is filing suit against chip giant Intel Corp. for what it considers its abuse of exclusionary practices, including discounts, rebates and marketing dollars to strong-arm customers into buying its chips. This is standard practice but AMD feels that it violates antitrust laws because the discounts are only offered if a customer agrees to buy most of its chips from the company. |
| 13 | 7374 | 1995 | In the late ‘80’s, CES leveraged its parent relationship with Citibank, the largest bank card issuer, into unique promotional relationships with the Company’s customers. “We would go to a big account…say a Macy’s…and we would give them 1/2 point of interchange, that the cardholder side gave up. And, we put that into a promotional pot that gave the merchant the opportunity to do special value offer promotions at Macy’s that were funded by Citibank. It gave us something unique with the merchant. |
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