VERBATIMS

Can you name a brand that successfully pulled out of a downward price discounting spiral?
If so, how did they do it?
Adidas.

They aligned themselves with only certain sports to become the dominant shoe in that sport, instead of trying to be a shoe for each sport and a fashion shoe. They put their R&D into soccer and tennis, and their advertising into that niche.
A few years ago, Nissan was in a sales slump.  They were relying on financing, incentives and "midnight madness" sales to move sheet metal.  The problem snowballed after revenue losses prompted them to cut their brand-building marketing plans and replace them with "distress" sales advertising, further reducing profits and eroding brand image.  But they have completely turned around.  Their president made a commitment to building the brand with a new campaign. With each new product they launch, they build on their image.  Now, they rarely price discount--in fact many of their newer models are selling above MSRP. Software companies also - charge less for academic cusotmers and more for industrial customers
airlines, olive garden
Although it cannot yet be determined a success, the airline industry has recently instituted new fees and costs to consumers.  In light of the current state of the airline industry, as well as the current economy the airlines have been slashing costs to record low levels during the past few years.  Recently, they have begun to insitute new fees and costs, as well as a variety of pricing standards to prevent any further lowering of costs. It is a risky gamble at a time when consumer spending is flat and airline travel is still at a low.
Amazon...ease of use, customer service, overall value proposition.
Apple
As much as I believe this is possible, no one readily comes to mind...what does that say?
Autos: Luxury brands like Lexus
Back in the mid-90s, I was working on Continental Airlines when they  attempted to compete directly on price against Southwest Airlines with the launch of their "Continental Lite" airline-within-an-airline.  The service was a complete disaster and the airline lost millions.  Under the leadership of Gordon Bethune, Continental wisely abandoned this folly and got back to the business of focusing on what they had rather than what they supposed they should be.  The shift back to their regular pricing and attention to what really mattered to air travelers, on-time performance, fewer lost bags etc., got them back on track and to back to profitability (at least temporarily).
Budweiser was price promoting heavily at the shelf and began introducing larger pack sizes such as 18 cans.  This allowed them to put an entirely different price point on the shelf, create size variety and, in effect, confuse the consumer on the price per can relationship. All of this allowed them to offer fewer price discounts.
Campbell Soups
Can't say that I can.
Can't think of any right now.
can't think of one...
Can't think of one
Can't think of one.
Can't think of one.  I would imagine it would take a rather strong re-positioning with some improvement in the product quality or service associated with it.
Can't think of one offhand; re-valuing a brand is very difficult once it's lost value.
Cannot think of one,  But a good strategy to pull out of a downward price discounting spiral would be that while raising the price you offer value through other incentives such as free merchandise, non price promotione, etc.  Protect the price but ease the customer our of price discounting by increasing their value perception.  Not only by incentive offerings but by enahncing the brand equity via advertising and PR.

Chevron. Texaco.  
Chivas Regal - a few years ago they offered discounts, coupons and price incentives - that ended and the brand has reversed a
Chrysler...improved quality, and made a distinctive brand that was appealing to its customers.  I think they also began to target a different demographic to help pull out.
Coach:  Not really a downward price spiral, but more reviving from looming commodity goods status.  They reinvented the brand, injecting winning design and approachable prestige, so that the brand began to stand for approachable luxury especially when matched against Gucci, Prada, etc...  Light years today from where they were as a Sara Lee-owned product
Coke has done it.  So did Kodak.  They reinforced their brand image after taking discounting losses.
Colgate Toothpaste by adding value with new products. Avon Products by adding value with new products
Computer makers do it by bringing out the next generation/upgrade. Honda cars used to be cheap junk, but they brought it back through value and quality/reliability.
Continental, Marlboro
Converse sneakers? When they migrated from just Chuck Talyor's to upbrand leather models and hired b ball players to endorse them.
Dell Computer - Won marketshare with high volume low margin product and a sustainable pricing competitive advantage.   Now they sell at or above market $ based on a Brand/Service/Stability reputation and they make more $ than their closest rivals on the same $ value sale. HOW?:  While they were selling based on price they continued to message product excellence, business model, and the value of stability (backed by good CRM).  Now they are perceived as premium product and market leaders.
Dell did it in in PC's.   There business model (Direct, Low R&D) allows for the lowest cost structure in the industry.  They restructured Operating Expense, and lowered prices during the downturn.  Was able to take market share in a declingin industry.
Dell, Southwest, Nucor Steel, Ikea - they all sell their product with prices falling - and they continue to fall - and they are profitable because they designed their business as a 'low cost business model' so even at low and competitive prices, they are upto 5 times more profitable.  
Don't know
Don't know
Ford Motor Company - they have used sales and marketing information to selectively choose vehicles that will receive a rebate and/or lower interest rates while allowing fast selling vehicles the ability to 'sell themselves' without sales incentives. This has led to more profits overall.
Frontier Airlines - Discounted while United Airlines had their collective heads up their ass and have attrated new customers with United's decline, while raising prices yet remaining competitive
General Mills.
Glade (SC Johnson) and Air Wick by Wizard (Reckitt Benckiser) - have  launched many new and innovative product forms in the air fresheners product category.  Previous to these new form innovations, they were all competing in a saturated, low-price-point, low-technology, commodity marketplace (aerosol air fresheners, stick-ups).  By focussing on new air care technologies (ie. electric scented oil air fresheners) they have pulled themselves up and out of the price-is everything arena.
Gucci and Nina Ricci.
Harley Davidson did it by exploiting the psycho/social connection and building below total demand.
Harmon Kardon.  They nearly eliminated their low-end product line and switched to mid-to-upper stereo consumer equipment to become among the most-profitable in the world for its industry segment.
Honda.  Added value to the product or service while holding price.

Hyundai - quality
I'm sure there are some, but I can't think of any right now. Companies who discount their product continually tend to teach their customers that their product isn't worth what they ask as the "regular" price. It's difficult to come back after that. The exception might be Microsoft who uses discounting to drive off competition and then raises the price again.
I am unaware of such an example.
I can't think of one.
I can't think of one off the top of my head.
I don't know but it sure as heck wasn't McDonalds.
I have not studied an example that indepth.
I think auto manufacturers had downward pressure on pricing but have been able to capture earnings in the high priced SUV market.  All have premium products that play off the primary corporate brand.
I think Harley Davidson did. By becoming vertically integrated where they controlled all aspects of the brand including retailing and distribution.
it seems as if everyone's prices are on a downward spiral these days but it seems as if Sony in particular with it's high end TV's has avoided massive promotion to gain sales
Jeep - early 80's

Pulled out with new model - Cherokee
Lee Iacoca pulled Chrysler out of the fire and the team that took over before the Germans landed saved the day.  General Motors is going through the same transformation with some of the Chrysler stars at the helm.
Longenberger Baskets, Harley Davidson.  Both did it by examining their brand through the 5 P's and making sure that they corrected everyone.  In addition, they took the high road on each P and positioned themselves clearly so that price worked for them instead of against them.
maybe could be Clinique and Sephora and it works because of the brand equity based on quality, brand image, expertise.
maybe IKEA has played successfuly going down with prices keeping high and original brand positioning
McDonald's Japan in 1987/88. The industry escaled into a price war. McDonald's finally held prices to a profit assuring level and switched promotional gears to "fun" game promotions (Japan FTC does not allow big prizes) and the introduction of year round happy meals
Mercedes, BMW and others have cut entry prices, risking resale of the person who bought it the year prior at full price.  They've stayed profitable thru this by using added features to protect margins, and not letting service or quality lag in the downturn.  Brand Equity remains strong for both.
Michelin tyres, through sheer technical innovation.
Microsoft. By adding more capability to the product
most of the Procter brands - switched to EDLP
N/A
Nike in the 80's.  They finally went back to making good products that added/offered good product 'value' to the consumers

Nike
Michael Jordan
Nissan has successfully reduced it's reliance on rebates and discounted APR offers by reducing manufacturing costs, improving product quality and by bringing to market destinctive new products that more accurately reflect the brand personality.
Nissan...with more competitive and desirable products
No
No
No
No
No - but Philippe Steck created a $1000 chair which he then sold as part of his deal with Target for $9.00 and made more money  as a result.
No, I cant' name one.
Nope
No-- so many categories have suffered when brands get into a pricing war.  Tuna and bread, to name a couple.
not an easy question
Not at this time
Not exactly. I know that the consumer electronics category experiences price decreases for plasma t.v.'s, DVD players, and color printers. That's a function of production efficiencies and higher shipment volumes.
Not off hand
Not off hand.
Not off the top of my head
Not off the top of my head....
not off the top of my head, sorry.
Not really
oakley sunglasses. brand was down in early 90's.....now
Off the top of my head - no. McD's has killed themselves with the new value menu, and now that they are taking some items off, consumers are feeling cheated. You've got to be careful how low you go.

President's Choice - a private grocery store label. They went from a cheaper version of products to compete with brand names (salad dressings, sauces, cookies, etc). The products have such a high quality that President's Choice label has become a sought after brand name in it's own right in Canada. Keeps customers loyal to Loblaws chain as they want to buy President Choice products. President's Choice Chocolate Chip cookies #1 in Canada over Mr. Christie and other well known brand names - PC version no longer costs less.
Retail competing on product pricing
Rolling Rock Beer-  They were a cheap regional beer until they went with National Distribution.  Their imagery and marketing campaign positioned them as a "mico beer with a mainstream taste".  
Rowenta by beeing always ahead of competition with innovation.
Gillette on its razor line
Sanyo (or possibly Sankyo, I can't remember which) stopped selling through Wal*Mart because its effort to provide higher value - higher priced electronics was incompatible with the image associated with Wal*Mart
Saturn did not pull itself out of a downward price discounting spiral, but used the industry's price cutting to build an opposite brand. They built trust by being relevant --a maverick, they used grassroots marketing in add'l to traditional marketing to make the brand more approachable.
SBC comes to mind, though I cannot validate this hunch. They are driving the value of one bill for local and long-distance in a market where everyone else is talking about minutes and package pricing. I wonder if this approach is working. I can't believe that it is, but, it's a bold approach.  (Referencing TV ads in Northern California)
Seems like Carl's Jr. attempted to do so with $6 burger at $3 cost.
Several years ago Amtrak faced declining passengers on their long western routes in the winter months. And even steep discounting wasn't working versus alternate competitive means of travel. You couldn't even give away the seats. The solution: give people a new reason to take the train through the mountains in the winter time. Like skiing! Those same exact seats were repositioned under the sub "brand," Ski Amtrak along with some added value to pay off the proposition, attracting new users to the lines.
Smart Ones Frozen Meals:  stopped focusing on more FSI coupon inserts and moved into focused trade spending without the direct to consumer discounting
SnackWell's.  They found a broader, more meaningful connection with women consumers.  Through this created a bond that meant more than price.  Price discount is a good means for generating trial/retrial.  But the brand experience is what keeps them coming back.
southwest, aldi, wal mart
Suave - began as a discount brand
Suave, by offering a variety of spa oriented or herbal products to an evergrowing soceity of women/men who want to be well groomed at an affordable price
Take a loock at the turistical industry (hotels, airlines etc...)
Target....if you look at their work from the 80's, early 90's it was all discount...they could do that by-in-large because the category was as deep as it is today...but once Wal-Mart took over the "discount" position, Target was in trouble...in order to change their position, they had to change the inherent nature of their business and have successful become destination shoppers dream with discount kitsch....

Lee Jeans and Buddy Lee are yet another example of a price point to rebranded case study.
Target.  In the mid 80's, they were just another regional discount operation.  As late as 1990-1, they introduced their own version of the Wal-mart Roll Back program.  They, unlike many others, realized quickly that Bentonville would not be beat on price.  They began to build the image of the merchadise by introducing fashion forward apparel and home lines (captive and private brands.)  More recently, they introduced designer product and additional elements of "cheap chic."  They have thrived by being competitive on price and innovative on product.
Target!! I remember when Target was considered 'the low, deep discount price option - store environment was gross, customer service was horrible but price was somewhat low. As we know, no one can compare to the low-price Walmart giant so Target lost that battled and decided a different strategy. They have completely turned around by focusing a specific target market, by setting up certain expectations when you're in the store - re: environment, customer service, product selection and quality. The consumer probably chooses prices as the 2nd to last, if not very last, reason to shop @ Target.
Target, I suppose.  By moving from a cheap mass retailer to at least the perception of being a trendy, affordable design store.  Added value, or at least the perception of value, allowed them to move more upscale and with that came the ability to charge higher prices on some merchandise.
Target - repositioned it's image separating itself from category killer Walmart and the ailing K-Mart.
Target Stores may qualify, revitalized via investment in product and advertising.  Popeyes Fried Chicken fought the burger wars in the late 80's until deciding to focus on their product quality -- unique taste delivered with added value deals -- they turned the corner after some initial pain from stopping the couponing.
The cereal category is attempting to use on-pack promotions and better sku management to pull itself out of the price wars. Remember--a few years ago they put everything into price, couldn't win and all hell let loose.  Now you see the cereal companies paying more attention to added value offers, doing a better job of reinforcing brand through sponsorships and on-pack offers to protect the decision from being strictly a price decision.

The Gap - improved product & advertising
There are many examples, differentiation is the key.
THERE ARE TOO MANY BRANDS: ARMANYIROLEX,BOSS,CARTIER,ETC.
There is only one way out of a downward price spiral - that is product innovation.  People will pay a premium for great product.  They won't suddenly pay more for the same product that they have been trained to expect a discount on.
There may be one or two but I get exhausted trying to remember...
They all died! (or are about to)
they haven't pulled out of it but Southwest Airlines started with low prices and has managed to keep them there and people love them. maybe because they're so easy to work with, i.e. don't have hoops and hurdles to jump through to change itineraries, among other things.
Tropicana... made orange juice no longer a commodity.
Tylenol, by the application of actual data lot analysis and the new packaging that now proliferates the market. Hospital endorsment
Unilever's Suave; line extensions
University of Phoenix has established a national name recognition and expanded greatly based on convenience for their clients, not price.
VW - branding, targeting (knowing their target)
Wal-Mart continues to drive downward discounting and is humming along just fine.
Wal-Mart. Target. Pick any P&G brand. Freezer foods.
Wendy's.  While BK and McD's were beating each other up with discounting, Wendy's would offer new "premium" products that were appealing to it's consumer base and were able to charge for the product.  Wendy's ads focused on the desirability of the product vs. the cost leading their fans to say "I wan't that."
Whole categories have pulled themselves out of downward price spirals by relaunching brands at higher value propositions. Coffee comes to mind--although Starbucks probably created the opportunity for Maxwell House and Folger's.  Cascade Complete comes to mind in dishwasher detergent. While Gillette has done this every few years with new razors, they've wisely chosen to launch new brands with each generation of blades.
Winners clothing stores in Canada, was done by bring in better quality products, creating a cleaner easier to navigate store and ad campaigns focusing on discounted prices in assoicating to quality goods therefore in the long run getting the average buyer to buy better goods creating an increase in the average sale at the register