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Technology Stocks : Compaq
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To: Night Writer who wrote (28446)7/2/1998 6:13:00 AM
From: SC  Read Replies (1) of 97611
 
Lesson from Packard Bell: losing money for being too cheap; customer perception suffered resulting repurchase rate down. (Sent this to 3Com thread earlier by mistake.)

zdnet.com
...
Under Alagem, Packard Bell did not hesitate to cut prices in order to win market share. The company prided itself in becoming the first big computer company to sell a sub-$1,000 system. In late May, it dropped prices on one consumer line system that listed for $699.
...
During the first quarter of 1998, the company's unit shipments fell by 9.8 percent, according to Dataquest. Although privately-held, analysts suspected that Packard Bell was losing money even before it began losing market share.

On top of that, Packard Bell suffered from a continuing consumer perception that it lagged the competition in quality and service. In a recent survey, ZD Market Intelligence found that the repurchase rate of Packard Bell systems dropped to 33 percent from 46 percent.
...


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