Brainstorming Ideas: Final Customer Purchasing from the Producer of the Product

Final customer buying from a product producer. Final or end-user customers incur four cost steps in connection with the product sold by a producer.

Use Steps: Use steps include all the customer's value added activities or the consumption of the product itself. These steps include all the costs the customer incurs in employing the product in its intended use.

A. Knowledge

B.
Resources: Reduce resources required for the use of the product

1. Money – Reduce the money the customer uses with the product.

   1. Reduce the level of payment for use of the product

   2. REDUCE THE CUSTOMER'S SPENDING ON PEOPLE, PURCHASES OR CAPITAL COSTS THE CUSTOMER USES WITH THE PRODUCT ITSELF

      1. Warnings and advice Examples>>

      2. People costs

         1. Substitute technology for people Examples>>

         2. Use components not requiring training on use Examples>>

         3. Enable substitution of low-cost people for high-cost people Examples>>

      3. Purchase costs used with the product itself

         1. Reduce need for third party assistance used with the product

            1. Use less expensive form of distribution Examples>>

            2. Build directions into the products Examples>>

            3. Substitute technology for labor Examples>>

            4. Use internet service to gather and centralize information Examples>>

         2. Reduce purchases of items used with the product itself

            1. Speed process to reduce need for purchases Examples>>

            2. Reduce need for energy to use product

               1. Enable product to use multiple sources of energy Examples>>

               2. Design product for low energy consumption Examples>>

               3. Design product to use variable amounts of energy Examples>>

            3. Modify product for more than one use Examples>>

            4. Add value to product to reduce net purchase cost Examples>>

            5. Enable product to use lower cost purchases Examples>>

            6. Use video conferencing Examples>>

            7. Correct errors in billing Examples>>

            8. Other Examples>>

      4. Capital costs

         1. Reduce required inventory Examples>>

         2. Provide surge capacity Examples>>

         3. Reduce fixed capital investment Examples>>

         4. Reduce space required for product Examples>>

         5. Provide for inexpensive addition to capacity Examples>>

         6. Make product backward compatible with earlier versions Examples>>

         7. Break large purchase into smaller units Examples>>

      5. Reduce multiple costs Examples>>

<<Return to Use Steps