SELF TEST #16: Estimating the Core Customers’ Life Cycle Costs Per Unit

Test #1:

What cost categories do Final customers incur over the life cycle of your product? Please explain each cost.

Test #2:

Identify the Final customers' product life cycle costs reduced by the following innovations:

McDonald's has eliminated its styrofoam containers.

Doctors' offices are selling, directly to patients, common prescription drugs that have been presorted into standard dosages.

"Long-life" lightbulbs burn 50% longer.

The new lavish attention companies such as Sony Electronics, British Airways and Virgin Atlantic are displaying among their elite customers is intentionally kept a secret from the public. The companies using the concierge service are trying to build a higher level of trust with their customers.

Test 3:

What cost categories do Intermediary customers incur over the life cycle of your product with the customer? Please explain each cost.

Test 4:

Identify the Intermediary customers' product life cycle costs reduced by the following innovations:

To help Wal-Mart optimize its stocking and merchandising, the company expanded its data warehouse to store and analyze two years of sales transactions. This data allows the company to concoct assortments of products that enables Wal-Mart to Sell more products at better margins.

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.

Miller Brewing Company is going to sell three of its best-selling beers – Miller Lite, Miller Genuine Draft, and Icehouse – in 16-ounce and 20-ounce plastic bottles as well as in the traditional glass bottles and aluminum cans. The nation's second-biggest brewer has been testing reaction to beer in plastic bottles over the past 18 months in more than a dozen markets and arenas. Miller would be the first U.S. brewer to use plastic bottles on such a large scale.

Skyjack's scissors platforms were an instant hit, largely because their design made mechanical parts easy to reach. All the parts were attached to trays that swung out at ground level. This innovation cut out hours of downtime for distributors who rented equipment.

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