Final Customer Purchasing from an Intermediary of the Product

Acquire Steps: Acquire steps include all activities the customer completes preceding the purchase of the product. These steps include the customer's efforts needed to identify and evaluate Intermediaries and travel to the Intermediary location.

Resources: Reduce resources required for the use of the product

Money: Reduce the money the customer uses with the product. For more ideas on using pricing, please see the Improve/Pricing section of StrategyStreet.

B. Reduce the customer’s spending on people, purchases or capital costs the customer uses with the product itself.

Capital costs

No. Year SIC Note
1 2002 5731 Rent-A-Center upgrades its merchandise as new models come out. Its products come from recognizable brands such as Sony, Whirlpool, Dell and Ashley. The average price per unit increased 3.5-4% a year, keeping sales on the rise. The stores average $650,000-$700,000 in annual sales. The industry average is $430,000. Their customers are usually in the lower middle income bracket. Rent-A-Center's biggest rivals are Aaron Rents, Rent Way, Rainbow Rentals and Bestway. The competitors' combined sales add up to less than Rent-A-Center's.
2 1998 5961 FHT is beginning to provide direct marketing and order fulfillment services to major corporations interested in outsourcing those functions.
3 2002 6021 Banks of all stripes often take the loans they have made to corporations, cut them up into parcels, and sell them to other banks and investors.
4 2002 6211 The new bonds that are available to the individual investor are available for purchase through more than 300 brokerage firms. The downside to the medium-term notes is that they have a duration of just a few years. The rates on the bonds are usually lower than those on bonds sold to institutional investors. Boeing sold $7.8 million in 10 year bonds, paying 5.6% to individual investors. Three days later it sold $600 million of 11 year bonds to institutional investors paying 5.8%. There is only a limited secondary market for the bonds so the individual investor may be forced to sell the bonds at discounts.
5 2002 6211 Companies on Wall Street are making it easier on individual investors to directly own corporate bonds. Companies such as International Business Machines, Household Finance, Dow Chemical and Diageo are selling bonds to small investors.
6 2003 7376 Application Service Providers succeed by staying focused on managing a small number of applications well. These firms sell and manage software, charging monthly fees. This allows customers to make a smaller investment with more personalized results.

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