Added Value Flashcards
What is Added Value
The difference between the selling price of a product and the cost of producing the product
What happens when there is no value added to a product
The business will make no profit and therefore will not be able to cover their costs
What are some sources of Added Value
- Branding
- Speedy Service
- Quality
- Design
- Convenience
- USP (Unique Selling Point)
Why is Speedy Service a good way to add value
Example: Mcdonalds
It’s Fast food not gourmet so the expectations are not to wait long
Why is Quality a good way to add value
Example: High-end software material
As customers are willing to pay more there is greater reliability therefore that business will have a better reputation so sales will go higher
Why is USP a good way to add value
Example: Friction erasable pen
No one else has it so sales will be higher and the business selling can charge higher prices
Why is Convenience good way to add value
Example: UBER
People may not always have cash on them but still might need to get to places therefore sales will be higher as it is very convenient because more people will use it if they don’t have cash on them
Why is Branding good way to add value
Example: Chanel
It’s a well known designer brand so it can charge higher prices hence sales will be higher as it will be established and trusted
Why is Design good way to add value
Example: Apple
Its attractive, looks cool and will appeal to people therefore sales go up.
