Check out this post by John Jantsch at Duct Tape Marketing.
I particularly agree with this point:
Add value before discounts - One of the first
places businesses cave is on pricing. Customers are getting a little
tighter with the cash, so the inclination is to cut the prices to make
the phone ring. It rarely helps and, long term, it hurts profit. I
suggest lumping in more value, more you time, more service, more
bonuses from partners to overwhelm your customer with something that is
clearly more valuable then the offering that is 2 bucks cheaper.