Intermediary Customer Buying from a Product Producer

Customer characteristics, and the segments they suggest, flow from the customer's reaction to the costs the customer incurs with the product over the product's life. We organize the innovation segmentation examples according to the costs the customer incurs. Each of these costs represents steps an Intermediary, or channel, customer must take in connection with the product. You should be able to fit your own particular industry's costs into these four typical costs. The examples illustrate where management teams in many industries have innovated to meet the needs of the specific customer segments.

Using the following thought outline, we suggest you conduct your innovation for new ideas to segment customers by needs.

1. OBTAIN: 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. Examples>>

2. SELL: Sell steps include the activities Intermediary customers take in selling and delivering the product to their customers. These activities include their own customer recruitment and product delivery. Examples>>

3. GUARANTEE: The Guarantee steps include the activities required for the Intermediary customer to keep the product or service in working order for the Final user. These activities include both problem assessment and correction. Examples>>

4. RETURN: The Return steps include activities required to return defective product to the supplier. These activities include the work to deliver the product to the supplier and receive credit for the returned product. Examples>>

Basic Strategy Guide Users Go To: Step 12

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