Total Cost of Ownership – Printers
While price is often the focus of balancing performance and the cost of attaining that performance, the total cost of ownership is an important aspect of measuring and communicating economic value to customers and potential customers. Kyocera seeks to match the performance of competing printers in color quality and speed, while creating superior customer value with their lower total cost of ownership.
The Kyocera advertisement above challenges potential customers to understand the total cost of a Kyocera printer along side of any comparable competing printer. This is accomplished with their TCO Tracker website. A few questions are asked with respect to printing usage and needs along with a benchmark competitor. With this information the TCO Tracker computes the total cost of ownership for both printers and the Kyocera TOC Advantage as shown above.
Total Cost of Ownership – Automobiles
Shown below is a short summary of ownership costs, including the costs of acquiring, installing, using, maintaining and replacing a product. Honda has a higher net price than Ford, but the cost to own is much lower over the life of the product. This creates a savings of $3054, more than making up for the higher net price. A portion of this is savings advantage is derived from a higher resale value at the time of product replacement.
Total Cost of Ownership – Medical Electronics
Tracking ownership costs is even more important for many sophisticated products such as medical equipment. In one company we found that a product priced at $60,000 saved a customer $20,000 more per year than a competing product priced at $50,000. Over a 5-year product life this is $100,000—making the price premium of $10,000 seem trivial. The company’s cost of ownership advantage could be traced to a lower cost per analysis, fewer errors due to ease of use, higher equipment uptime, lower quality control costs due to higher reliability, long product life by one year, and lower cost of documentation.
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