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 performance benefits
Reduce function benefits

Reduce options

No. SIC Year Note
1 0 1995 ABB found that naked solutions enabled it to charge less for power equipment & heavy industrial equipment than for the standard package. This helped it gain the business of companies who then often agreed to trade up by buying optional services.
2 3500 2002 Terex's strategy is based on the idea that customers are more interested in the capability and price of the equipment instead of the innovations. Therefore, Terex produces no-frills machinery and sells it at lower prices than rivals.
3 3571 2000 AOL and Sears have developed a partnership to work together to develop new home Net appliances. "Rather than give full Internet functionality, the solution is to just give customers the ability to do their most frequently used activities."
4 3571 2000 In 2000, New Internet Computer (NIC) Company introduced its new Internet computer priced at $200 without a monitor. The NIC is an Internet appliance that will browse the Internet and send and receive e-mail.
5 3571 2002 The $399 machines generally have enough speed and memory for everyday computing tasks. Some even come with a few bonus features. However, they are limited in memory and also miss out on features such as DVD players and CD burners that are becoming standard.
6 3577 2000 Netpliance has a device called the I-Opener. Its target market are non-technical people who want to have a simple inexpensive device to connect them to the internet without a personal computer.
7 3585 2001 Aaon has 12% of the rooftop air-conditioning market, worth $1.4 billion. It has done this by creating its own niche for semi-customized cooling systems, a mid-point between low-cost commodity equipment and high-end customized systems.
8 3651 1992 Mass merchandisers are increasing electronics sales by selling no-frills electronics gear. Increased sales attributed to updated styling, including new big-screen sets that sit on pedestals, and easy-to-use programming consoles.
9 3711 2000 GM is planning to lure younger buyers by rolling out seven vehicles between 2002 and 2004 costing $20,000 or less.
10 3861 1993 Fuji introduced the first disposable camera; sales were slow at first.
11 3944 2004 In an age of pricey, souped-up video game consoles, Jakks Pacific toy company has found a hit product in low-cost, retro-style video game machines featuring old standbys like Ms. Pac-Man and Pong.
12 4813 1999 Leap's customers travel less than high paid workers, so long distance wasn't crucial. Leap saved millions by limiting its cell sites to urban areas and avoiding costly roaming agreements with other carriers.
13 7376 2005 Rivals have scoffed at Electronic Data Systems' collaboration initiatives. IBM has been heavily involved in the business process outsourcing segment and has a lot of expertise. IBM says that a combination of hardware, software, and research prowess makes it a better choice than EDS. Still, EDS' strategy makes it a better match for tech buyers who want simplicity and lower costs.

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