Final Customer Purchasing from the Product 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.

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

Create price tiers

No. SIC Year Note
1 2731 1990 Dover has an eclectic backlist of 4,000 titles on art, science, crafts, chess, music and architecture. Because some of these are in the public domain, they require no royalty payments – so Dover's books sell for 30% below comparable books elsewhere.
2 3571 2004 Mainframe computers, replaced by the midrange servers of Sun Microsystems and Compaq, are once again gaining popularity after being dismissed as boring and overpriced in the 1990's. IBM set out to address common complaints. Software pricing was revamped to let customers pay according to how much of the system they use
3 3674 2003 Intel unveiled the first result of its new design focus on processor utility over raw speed as the Pentium M. It used less than one-third the power of earlier chips, and in tests, it performed calculations more quickly than many existing microprocessors with higher clock speeds. It was also about two-thirds their size, making it less costly to manufacture. Yet the new chip commands a higher price: a 1.7 gigahertz Pentium M is roughly equivalent in performance to earlier portable chips operating at 2.4 gigahertz, but Intel gets $182 more for it.
4 3691 1998 The new Duracell Ultra battery will last up to 50% longer than ordinary alkaline batteries. They reduced electrical resistance, and reformulated the battery's chemistry. Duracell plans on asking a 20% premium in exchange for this improvement.
5 4100 1986 UPS is switching to distance-based pricing for domestic air shipping. Rather than relying solely on a package's weight, it will factor distance into the rates. As a result, charges for long-distance deliveries will rise as much as 28%, while shorter air deliveries will cost as much as 40% less. Overall, prices for domestic air delivery will rise about 5%.
6 7011 1992 Ski resorts (Northstar; Winter Park Resort; Mount Bachelor) are offering flexible pricing: charge for # of runs, by the hour, and offer locals discounts to gain and retain customers.
7 7379 2004 The product lifecycle management software industry is developing but the market remains crowded with large firms, start-ups and midsize players. Arena Solutions leases software, rather than sells it outright. The company keeps the software on its servers, doling it out per customer need. Intuit uses the company to track its product data and any changes to software packaging.

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