html5-img
1 / 15

Added Value

Added Value. AS Business Studies. Aims and Objectives. Aim: Understand Added Value Objectives: Define Added Value Calculate added value Analyse methods of adding value Evaluate the factors needed to maintain a USP. Starter. What do you think added value means?. Added Value.

phil
Télécharger la présentation

Added Value

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Added Value AS Business Studies

  2. Aims and Objectives Aim: • Understand Added Value Objectives: • Define Added Value • Calculate added value • Analyse methods of adding value • Evaluate the factors needed to maintain a USP

  3. Starter • What do you think added value means?

  4. Added Value Added Value = the difference between the price of the finished product/service and the cost of the inputs involved in making it.

  5. Added Value Example • Sales Revenue • 1,000 units sold for £20 each = £20,000 revenue • Costs • To make 1,000 units • Raw Materials - £7,500 • Labour - £5,000 • Other production costs - £2,500 • Total Costs = £15,000 • Added Value • £20,000 less £15,000 = £5,000 Added Value

  6. Calculate Added Value For 2000 Units • Sales Revenue • 2,000 units sold for £30 each • Costs • To make 1,000 units • Raw Materials - £8,000 • Labour - £5,000 • Other production costs - £4,000 • Added Value

  7. Added Value Example • Good quality potatoes make great potato chips or crisps. But what do you with the smaller or mis-shapen potatoes which fail the raw material quality test for a premium crisp brand? Simple, you use them to create a premium brand of vodka… • http://www.tutor2u.net/blog/index.php/business-studies/comments/adding-value-turning-waste-into-gold

  8. Ways of Adding Value • What methods can you think of to add value? • In other words, what would allow you to charge a high price and cut costs to increase added value?

  9. Ways of Adding Value

  10. Unique Selling Points (USP) • A characteristic of a product that makes it different from other similar products being sold in the market such as design, quality or image. • One of the best ways to add value! • How many product’s USPs can you think of?

  11. The Importance of a USP • What may be the benefits of having a USP?

  12. USP Evaluation • Reaction of competitors • Demand being maintained over time • Advertising and publicity of USP What does the maintaining of a USP depend on?

  13. Benefits of Adding Value • What may be the benefits of having a USP? • Charge a higher price • Create a point of difference with competitors • Focuses business on its target market segment

  14. Signs That a Small Business Is Adding Value • Strong gross profit margins • Gross profit/Sales • A strong signal • Repeat Business • Sign of satisfied customers • Suggests customers feel they are getting value for money • Good brand or name recognition • Important for word of mouth recommendation

  15. Plenary Quiz • Define added value. • What is the formula for calculating added value. • Explain three methods of adding value. • Define a USP. • What does the maintenance of a USP depend on? • Give two signals that a small business is adding value.

More Related