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.

B.
Resources: Reduce resources required for the use of the product

1.
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 size, speed or power

No.	SIC	Year	Note
1	3571	2002	Thin clients are best for simple chores such as filling out forms and surfing the web.
2	3571	2001	For the hand-held computer market, Palm and Pocket PC are competing to win new customers. Palms are priced $150 to $450 while Pocket PCs run from $500 to $900. Pocket PCs have better colors and faster processors than Palms, key for games which are increasingly popular.
3	3571	2004	Mainframe computers, replaced by the midrange servers of Sun Microsystems and Compaq, are once again gaining popularity after being dismissed as boring and overpriced in the 1990's. IBM set out to address common complaints. The company shifted from supercomputer-like bipolar logic chips to the more common CMOS processor and cut prices.
4	3571	2002	Thin client devices are cheaper to buy and maintain than PCs. The stripped down systems off load data processing storage and applications to server computers. Thin clients grew 21% last year while PC shipments fell 4%.
5	3571	2002	As personal computer sales languish, companies are turning to thin-client devices to boost sales. The devices are cheaper to buy and maintain than PCs, offloading data processing, storage and applications to servers. Thin-client shipments grew 21% in 2001 while PC shipments fell 4%.
6	3571	2002	Neoware Systems, the No. 2 supplier of thin-client systems, is selling a bundled package of software and hardware that lets business customers deploy the devices. Neoware's systems run from $300 to $700 per seat, plus a $30-per-seat annual fee for software upgrades. The systems are dumb terminals on desktops that connect directly to a server. They can run on any system. The devices help customers save on administrative and hardware costs when compared with traditional PCs. Customers include Hollywood Entertainment Corp, Wal-Mart Stores and Circuit City Group. Neoware currently holds 30% of the market share, while market leader Wyse Technologies has 41%.
7	3674	2000	The semiconductor manufacturing standard leaders hold on to some of their old chips because there is demand for them in industries using less sophisticated devices. Older chips use less power and are considerably cheaper.
8	3711	2001	The South Koreans are introducing new products to tap new markets. Kia will introduce the Rio station wagon priced at $8900 for working mothers. It is the lowest priced station wagon on the market.
9	3861	2004	To tackle the cost of home printing, H-P focused first on paper. H-P had been using paper from expensive specialty mills. Then, last year, H-P executives say they figured out how to make photo-quality paper at a cheaper mass-market mill in Europe, slashing the consumer's price for a 4-by-6 sheet of photo paper to 10 cents, from 30 cents. Trimming the cost of ink was a more delicate task, because the company relied so heavily on ink profits. So, it borrowed a trick from cereal-makers, reducing cartridge prices by putting less ink inside, and making the cost of ink overall appear cheaper.
10	3944	2004	From Japan's SSD Co. comes XaviX with its own console and sports gear. It simulates sports such as tennis and baseball with special equipment. However, the XaviX system has low-resolution graphics, despite its good sound and motion dynamics. It costs $79.
11	4111	1989	Federal Express is junking its flat-rate price structure and will now charge for its package-delivery services according to the distance a parcel travels. So rates will go down for short-distance packages and up for long-distance. One year ago, UPS did the same thing.
12	4813	1998	Right now, packet switched voice calls are cumbersome and slow. This does not appeal to business customers and 81% of Telecom's 540 billion world-wide annual revenue comes from simple voice calls.
13	6321	1990	Insurers used to lump small & large employers together & charge all an average cost. But company began charging according to the health profile of individual workers. When someone at a small company gets sick, the company has to bear full cost of increased risk. Pass part of cost to customer.
14	6331		Chubb Group is offering a separate vacation home policy that can lower premium costs. It adjusts for differences in the way people use their first & second houses.
15	7374	2001	QuickBase from Intuit may be a successful application service provider. It offers simple and inexpensive way to build databases for small business.

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