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.

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

People costs

Enable substitution of low-cost people for high-cost people

No. SIC Year Note
1 2844 2005 Over-the-counter whiteners, the cheaper alternative to in-office procedures, range from $10 to $50, include paint-on, dental trays and adhesive strips. It is less expensive than the $300 to $600 charged by dentists for custom trays or light-activated procedures. All treatments, whether in-office or over-the-counter, use peroxide to bleach the teeth. With over-the-counter trays and paint-ons, the improvement is modest. Crest Whitestrip, manufactured by Procter & Gamble, seem to be the most effective, often overtaking more expensive treatments in studies. They take less time but only cover eight teeth while professional trays cover the whole mouth. The version sold only through dentists office contain more peroxide and offer the dentist more profit because of high markups.
2 3714 2002 Johnson Controls shifted its focus from assembling automobile seats to providing automakers with integrated interior modules and complete cockpits. Thus, the company has moved from simply manufacturing a high-quality product to addressing automakers' higher-order needs: reducing the risk and complexity of vehicle design and improving the efficiency of vehicle assembly.
3 7379 2004 Businesses that sell low-cost information technology services or business transformation outsourcing take over entire IT networks for big banks, retailers or manufacturers. The companies now provide accounting, customer service, human resources and industrial systems support. Centers are located in countries such as India as they have pools of educated, English-speaking workers. Rates often run 40% lower than the U.S. IBM, Accenture and Hewlett-Packard have all shifted operations.

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