Marketing Channel Strategy

END-USER ANALYSIS
329
The business PC buyer values pre-sale information about what products to buy, in 
what combinations, with which peripheral computer devices and service packages, 
as well as post-sale information if and when components or systems fail.
For some manufacturers and retailers, such information sharing has been clas-
sified as solutions retailing, which appears crucial for generating new and upgrade 
sales from end-users. Home Depot offers do-it-yourself classes in all sorts of 
home improvement areas; computer and software companies like Hewlett-
Packard (HP) and Microsoft have followed suit, setting up “experience centers” 
in retail stores to enhance sales of complicated products whose benefits con-
sumers may not understand, such as Media Center PCs, digital cameras that 
print on computers, personal digital assistants, and the like. A collaboration 
between Microsoft and HP offered a series of educational programs at various 
retailers, designed to increase sales of HP Media Center PCs. One section of the 
display, called “Create,” showed consumers how to use the Media Center PC as 
a digital photography center with Microsoft software. Other displays revealed 
how to use the PC for home office applications, as part of a home office net-
work, and as a music center. The mini-classes were run by a third-party firm that 
staffed the retail store booths. For HP, consumers’ purchase intentions increased 
by as much as 15 percent when they saw these product demonstrations, and 
further evidence indicated that the programs strengthened the products’ brand 
image and brand equity. Such information dissemination is a costly proposition, 
though; Microsoft and HP bear the costs, not the retailers themselves. They also 
view such efforts as crucial in the short run but redundant in the longer run, 
because the relevant information eventually diffuses into the broader consumer 
population.
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The trend is continuing as Microsoft adds retail stores to provide a 
two-way communication link with its end-users.
Note that price has not been listed as a service output. 
Price
is what the customer 
pays to consume the bundle of product + service outputs; it is not a service that 
gets consumed itself. However, it is significant in the sense that end-users routinely 
make trade-offs among service outputs, product attributes, and price, weighing 
which product/service bundle (at a specific price) provides the greatest overall util-
ity or satisfaction. Because of this trade-off, marketing researchers often investigate 
the relative importance of price, together with service outputs and physical prod-
uct attributes, in statistical investigations (e.g., conjoint analysis, cluster analysis), 
consistent with our conceptual view of price as something different from a service 
output, just as a physical product attribute is not a service output yet still affects an 
end-user’s overall utility.
The six service outputs we have discussed here are wide ranging but still may not 
be exhaustive. That is, it is risky to adopt an inflexible definition of service outputs, 
because different product and geographic markets naturally may demand different 
service outputs.
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END-USER ANALYSIS
330
S E G M E N T I N G E N D - U S E R S B Y S E R V I C E 
O U T P U T
Service outputs clearly differentiate the offerings of various marketing channels, and 
the success and persistence of multiple marketing channels at any one time suggests 
that different groups of end-users value service outputs differently. Thus, we must 
consider how to group end-users according to their 

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