THE CONSUMER COST MATRIX: A NEW TOOL FOR PRODUCT, SERVICE, AND DISTRIBUTION CHANNEL DESIGN

Abstract

The purpose of this article is to propose a new framework for examining the relationship between the consumer and the product, focusing not on the benefits the consumer seeks to maximize, but on the other side of the ledger—the costs the consumer seeks to minimize. These costs tend to fall into the same categories of costs faced by other participants in the distribution channel. By conceptualizing the consumer as an active channel member, rather than as a passive recipient of products and services, we are able to present a systematic matrix of the total costs that consumers may weigh against benefits in their shopping, purchasing, and use decisions. On the basis of this framework, we suggest ways in which product and / or channel designers can improve their performance through deeper insights into consumers' cost tradeoffs.

Citation

Funkhouser, G.R. and Parker, R. (1986), "THE CONSUMER COST MATRIX: A NEW TOOL FOR PRODUCT, SERVICE, AND DISTRIBUTION CHANNEL DESIGN", Journal of Consumer Marketing, Vol. 3 No. 3, pp. 35-42. https://doi.org/10.1108/eb008168