Final Customer Purchasing from the Product Producer

Acquire Steps: Acquire steps include all activities the customer completes preceding the use or the consumption of the product. These steps include the customer's efforts needed for evaluation and acquisition 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

Warnings and advice

No. Year SIC Note
1 1991 0 When buyers are unconfident, they buy value, not brand image. During recessions, private-label sales go up.
2 1996 1531 No matter how many willing buyers are out there, big builders aren't rushing out to build $60,000 homes, since it's harder to make money with such low-price houses.
3 1994 2043 Nearly 2/3 of all cereal sales are now made with coupons or other deals or promotions. Last year, the five biggest cereal companies spent $610 million to issue about 100 coupons for every person in America.
4 1990 2095 Instead of coaxing consumers to buy higher-quality, higher-priced coffee, producers have spent millions over the years cheapening their products' images by offering coupons and price cuts.
5 2002 3571 Dell, a PC maker, has lowered prices and sacrificed profits to gain market share. Dell is now the world's largest seller of PCs. It cuts costs to make its lean operations even more efficient: it halved factory space and moved call centers to India.
6 2000 3711 BMW's rivals have struggled with small-car entries. The Mercedes-Benz A-class, about the same size as BMW's planned 2-series, is widely thought to be unprofitable. Its production problems and weak demand for Audi's A-2 mean the company is likely to fall short in sales.
7 2003 3711 Operating margins for entry-level luxury cars can hit 10% compared with 5% for mass-market models.
8 2000 3861 In 1999, Kodak built its digital strategy around high end products, selling cameras that cost more than $500 on average and offering high resolution. While its sales rose, it holds the number 2 spot to Sony, it lost share in the increasingly crowded market.
9 2000 4512 After reporting a 400 percent growth in its pretax profit British Airways announced that it would sell its subsidiary airline Go. Go is a low-fare carrier in Europe. British Airways hopes to gain the benefit of its investment in Go by selling it.
10 2001 4512 In 1982, Southwest had just 27 planes, $270 million in revenues, and 2,100 employees, and flew to 14 cities. Since then, the company has grown into a $5.7 billion business. Based in Dallas, Soutwest now has more than 30,000 employees and flies to 57 cities.
11 2002 4512 United, Continental Airlines, Delta Air Lines and US Air unsuccessfully tried to emulate low-cost carriers with no-frills divisions.
12 2004 4512 U.S. Airways lowered its costs greatly when it was in Chapter 11 protection between 2002 and 2003. But it has been unable to thrive, because the domestic revenue environment is now controlled by discount airlines that have low costs and thus can afford to charge low fares. The company has been trying to reduce expenses and to model itself after discounters like JetBlue.
13 2003 6311 Rising customer expectations created a proliferation of new insurance products and more product complexity and cost. As this happened, specialized niche players developed products with lower premiums and faster handling of policies.
14 2000 7372 In December 1999, Oracle software company cut prices to corporate customers by 40% to 50% for its new Internet database 8i, hoping to stimulate demand.
15 2002 7389 Companies compensated employees with bonuses and stock options thus enabling them to share the good time with workers while preserving their ability to slash costs in bad times by rolling back special pay. An estimate 66% of U.S. workers got variable pay last year, up from 30% a decade earlier. Losing a bonus may be the price of saving jobs. Growing evidence supports that companies cut fewer workers in the recession that began last March than they would have if their pay had been less flexible. While companies keep work, variable pay rose 9.5% in 1999 then slowed to 6% growth in 2000.

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