A 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

Purchase costs used with the product itself
Reduce need for third party assistance used with the product

Use less expensive form of distribution

No. SIC Year Note
1 3571 2000 Competing with Dell Computer's speedier and cheaper direct-sales model, Compaq Computer, Hewlett-Packard and IBM started to cut out the middleman wherever they could. In May 1999 Compaq dropped all but 4 of its 39 distributors at a time when only 20% of sales were direct. Today it's aiming for 60%.
2 3571 2001 Compaq and HP sell to businesses and consumers, mainly through middlemen. Both companies also sell a growing number of their computers directly to customers. This direct-sales model is the purview of both companies' arch-competitor, Dell Computer.
3 6141 2000 Ace is the nation's biggest check-cashing chain with services ranging from bill payments to selling money orders. Ace Cash Express appeals to families with yearly income on average of $35,000 who don't have bank accounts and need small amounts of cash at a time.

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