Obtain (Customer) Cost

In the customer life-cycle cost of a product, used to develop product and service innovations, the cost an Intermediary Customer incurs to become aware of its potential suppliers of a product, to understand the differences among the products of its alternative suppliers, to order and test the product, and prepare it for sale.
(See also Sell Cost, Guarantee Cost, Return Cost.)

Example 1:

Spiegel and Time Warner are planning a catalog-based home-shopping channel, Catalog 1.
(Year 1994-SIC 4841)

Explanation: This innovation helps customers find and evaluate potential suppliers because customers recognize the well known brand names and view them favorably.

Example 2:

VF has a market response system (MRS), a computerized link between the company and the cash registers of its retailing partners. The MRS enables VF to record detailed info about what is actually selling at individual stores. It helps VF tailor its manufacturing.
(Year 1992-SIC 2300)

Explanation: This innovation has enabled VF to estimate more accurately both its demand as well as that of its retailing partners.

Example 3:

A shared info-technology system, Okumalink, keeps distributors informed about the location and availability of machine tools and parts. If the part is available, the distributor can order it electronically. If not, the distributor uses Okumalink's email to locate the part.
(Year 1996-SIC 3541)

Explanation: This innovation reduces the customer's cost of tracking inventory and ordering the product.