Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 35.53

-1.1%

Nov 14 9:30 AM EST

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To: Paul Engel who wrote (63869)	9/3/1998 7:17:00 PM
From: Road Walker	Read Replies (4) of 186894

Paul, re: "Ron - Re: " How do price cuts help profit margins?"" People often get confused between gross margin percent and gross margin dollars. Pricing in a dynamic market is an art. There is almost always lower UNIT sales at incrementally higher prices, at a certain hard to define point the lower UNIT sales (because of consumer price resistance) overtake the increased gross margin dollars. Determining when increased unit sales at lower gross margin will produce more profit dollars is a little bit of science and 90% gut instinct. Intel years ago said their primary concern was gross margin dollars, NOT gross margin percentage. I believe that is still their financial policy. It's one of the reason I still hold a bunch of Intel, I like companies that like to make real money, not work towards artificial goals. Just expanding on your comment. John

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