Intermediary Purchasing from the Producer of the Product

Intermediary Customers Purchasing from the Producer of the Product. Each of these costs represent steps an Intermediary or channel customer must take in connection with the product.

Obtain Steps: The Obtain steps include all activities preceding the selling of the product. These activities include the costs of identifying potential suppliers and stocking the product.

2. Emotional: Segment customers according to the personal emotional needs of the segment.

B. Needs to avoid sources of anxiety

3. ECONOMIC LIMITATIONS: Segment customers according to the limitations set by their economic interests and concerns

1. Spending power of current or potential segments Examples>>

2. Segment's approaches to limit on spending

   1. Segments who might face psychological spending limits Examples>>

   2. Customer segments with preferences for price point alternatives to the present product

      1. Lower price point

         1. With less Function Examples>>

         2. With less Reliability Examples>>

         3. With less Convenience Examples>>

         4. With fewer benefits in more than one Performance category Examples>>

      2. Both higher and lower price points Examples>>

3. Potential improvement in income of current customers

   1. Customer segments whose revenues could increase if the supplier:

      1. Introduced additional products for the segment to sell Examples>>

      2. Offered the segment access to new customer relationships controlled by the supplier Examples>>

      3. Taught the segment how to sell more effectively Examples>>

      4. Limited competition for the segment Examples>>

   2. Customer segments whose costs could decrease if the supplier:

      1. Paid for some costs of the segment Examples>>

      2. Created an organization of segment members to save costs Examples>>

      3. Offered the segment use of the operational infrastructure controlled by the supplier Examples>>

4. Savings of potential product vs. current solution

   1. Level of savings over the current product cost system

      1. Low – product saves 25% or less of current solution cost, including user time Examples>>

      2. Medium – product saves 25% or less of current solution cost, including user time Examples>>

      3. High – Product saves more than 25% of current solution cost, including user time Examples>>

   2. Savings on customer building block costs

      1. People costs Examples>>

      2. Purchases costs – Segment saves purchase costs Examples>>

      3. Capital costs – Segment saves capital costs Examples>>

      4. Multiple costs – Segment saves multiple costs Examples>>

   3. Savings from the creation of economies of scale for customer segments who incur costs at levels above those of currently available through economies of scale Examples>>

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