Change Performance Features in the Product and Service Package
Performance Benefits Examples
This action changes the individual features of the product and service package your company uses to fulfill customer needs. A product and service package has four potential types of features. You can change any one, or several of them, in order to arrive at a new price for your current product:
Primary Features solve the key needs of the customer;
Support Features include the services that deliver and otherwise support the Primary Features;
Related Features include additional features the customer may choose to include with his purchase of the product, sometimes for an additional cost;
Unrelated Features include benefits that a supplier offers to make a product more attractive to a customer, but that have little or nothing to do with the Primary Features of the product. The examples demonstrate changes in features.
1. Primary Features: You may change the features that fulfill the primary need of the customer.
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CHANGE PRICING/PERFORMANCE FEATURES EXAMPLE: Primary Features |
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NO. |
INDUSTRY SIC |
YEAR |
EXAMPLE |
| 2 | 4813 | 1997 | Sprint Sense Day plan offers 15 cents per minute, around the clock, if you tell Sprint you're a work-at-home person or homebound. |
| 3 | 4813 | 1997 | Sprint Sense Day plan offers a 10-cents-per-minute rate on the one number you call the most. |
| 4 | 4813 | 1996 | IDT charges $15.95 a month with IDT phone service, and $19.95 without it. |
| 5 | 2834 | 1995 | Glaxo priced its Zantac at a 50% premium over its competitor, Tagamet. It relied on the product's perceived value to the customer, to sell: it is easier to use, has fewer side effects, more compatibility with other products. Add price point. |
| 6 | 3579 | 1995 | HP unveils its first copier today, CopyJet. CopyJet is less than one-tenth the price of most conventional color copiers. It also uses plain paper, another savings for users. But it's slower than high-end machines, and the image quality isn't as good. Add price point. |
| 2. Support Features: You may increase or decrease the level of features that support the product. These features include delivery times, minimum order quantity, warranty, cancellation policies, advertising support and other features which support the Primary Features of the product. |
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CHANGE PRICING/PERFORMANCE FEATURES EXAMPLE: Support Features |
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NO. |
INDUSTRY SIC |
YEAR |
EXAMPLE |
| 1 | 7514 | 1995 | National is hoping to penalize people who rent cars at a discounted rate, but return the vehicles before the five days are up, retroactively removing the discount. |
| 2 | 7514 | 1995 | National will offer new levels of discounts in Florida this spring. But, now it will require travelers to reserve and pay for cars 14 days in advance and agree to a cancellation fee ranging from $25 to the entire price of the rental in order to get the bargain rates. The standard is not to impose cancellation fees. |
| 3 | 8900 | 1995 | Bugs guaranteed total pest elimination and commanded a price ten times the industry norm because it focused on those customers, such as hotels and hospitals, for whom the cost of failure was extreme. |
| 4 | 4813 | 1994 | MCI offers "proof positive," a pledge to scrutinize a company's calls every 90 days and always charge the lowest possible rate. |
| 5 | 3999 | 1993 | Sharper Image has also asked for "guaranteed sale" rights from some suppliers, meaning the suppliers must take back products that don't sell. |
| 3. Optional Related Features: You may change features that are not part of the standard set of Primary or Support Features. These features include product options as well as benefits you may add or subtract that encompass more of the customer's needs than does the standard product. |
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CHANGE PRICING/PERFORMANCE FEATURES EXAMPLE: Optional Related Features |
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NO. |
INDUSTRY SIC |
YEAR |
EXAMPLE |
| 1 | 3711 | 1993 | Volkswagen offers a new low monthly lease rate on its new 1993 Golf GL and Jetta. Offer is only for CA residents. Leasing the car is selling per month. |
| 2 | 3711 | 1996 | GM has been equipping cars with the options that most people want and then selling them for a price consumers are willing to pay. No-haggle pricing. Traditionally, GM has sold cars by transaction. Now it's fixing a standard price by product. |
| 3 | 3571 | 1995 | Cabletron is offering free network consulting to 3Com and Chipcom customers. |
| 4 | 4512 | 1995 | Delta became the latest carrier to raise its fee to $50 from $35 for changing or rewriting a restricted ticket, following Northwest, United, and TWA. |
| 5 | 4724 | 1995 | American Express continues to charge $10 for reissuing a ticket, $10 for overnight priority mail, $75 for planning a complicated domestic itinerary and $150 for planning a complicated international itinerary. |
| 4. Optional Unrelated Features: You may add or subtract features that have no impact on the customer's use of the current standard product, but are part of the product package to make it more attractive to the customer and to distinguish it from the competition. |
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CHANGE PRICING/PERFORMANCE FEATURES EXAMPLE: Optional Unrelated Features |
|
NO. |
INDUSTRY SIC |
YEAR |
EXAMPLE |
| 1 | 4813 | 1995 | In April, Sprint is expected to offer several months of free cable programming to new customers. Offers a totally different product for signing up (cable time). |
| 2 | 4813 | 1995 | AT&T has a True Rewards program that awards points for long-distance calls. The points – earned if you spend more than $25 a month – can be exchanged for frequent-flier miles on USAir, United, or Delta. MCI offers miles at the same rate on other airlines. Sprint, too. |
| 3 | 4813 | 1993 | Sprint's "Priority" long-distance plan includes free gifts such as coffee pots and sea cruises based on their volume of usage. |
| 4 | 2111 | 1992 | Philip Morris is offering discount come-ons like torch lights, barbecue lighters and Marlboro Racing watches. |
| 5 | 5942 | 1992 | Mystery Library offers the possibility of free books and/or a surprise gift if you send in a card and happen to have the right code on it. There's no obligation to purchase a book. |