Final Customer Purchasing from an Intermediary of the Product

Use Steps: Use steps include all the Final customer's activities to find the appropriate product category at the Intermediary, to choose among the alternatives to the product and to take delivery of the product.

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.

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

Reduce price for a comparable product

Lead prices down

No. Year SIC Note
1 2005 3695 TiVo became popular at its debut, gaining 2.3 million subscribers. However, TiVo's main outlet has been DirecTV, which last month announced plans to begin using a competing DVR service. DirecTV is offering new customers a free DVR with a $5 monthly fee. Companies like Microsoft and HP are promoting a new computer that includes DVR functions without TiVo's $12.95 monthly fee.
2 2005 5300 Wal-Mart customers are reaping the benefits of its new financial services. They can cash payroll checks for just $3, transfer money to Mexico for $9.46, and buy a money order for 46 cents. Some competitors charge twice as much. By one rival's estimate, the market for services that Wal-Mart already offers is worth about $5 billion a year in fees, leaving plenty of room for it to slash prices while making a profit.
3 1988 5311 Sears is extending as much as $5 billion of additional credit to 10 million of its retail charge-card customers in an aggressive bid to boost holiday sales and clean out inventory.
4 2002 5311 Unlike owners of only a few gasoline stations, chains of grocers and discount stores have deeper pockets, are able to work with larger volumes and have more negotiating power with wholesalers to buy gasoline supplies at good prices.
5 2004 7822 Netflix is gearing up for the entry of in the already competitive online DVD rental business. Netflix is reducing prices to add subscribers to its 2.2 million total. The service requires customers to pay a monthly subscription fee to create a personal account and request DVDs online. Customers can keep the DVDs as long as they want and return it to receive the next item on the list. Wal-Mart and Blockbuster entered the market in 2002 and Netflix paid little attention. However, the possible entry of internet giant Amazon has convinced the company to lower prices; the company is popular with internet users and will advertise to those customers without having to work to gain new clients. Netflix may weather the storm because of its experience in the distribution and marketing of the service it pioneered.

<< Return to Use Steps