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ADDED VALUE

ADDED VALUE. These ‘flip flops’ both perform the same function.... So why the difference in price?. ADDED VALUE. The difference in value between the price of the finished product and the cost of materials used. Added Value =

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ADDED VALUE

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  1. ADDED VALUE These ‘flip flops’ both perform the same function.... So why the difference in price?

  2. ADDED VALUE The difference in value between the price of the finished product and the cost of materials used. Added Value = Sales Revenue - Cost of bought in materials, Components and Services

  3. Value added at Portmeirion Pottery £000s Sales turnover 30,785 Raw materials 7,083 Value added 23,702 % value added 335%

  4. Build , Quality & product features Speedy Service/ Customer service Sources of Added Value USP Design/ Production Branding & Advertising Convenience/Location

  5. USP (Unique Selling Point) • A feature of a product / service that allows it to be different from other products. • Increase “Loyal customers”, “Sales Volume”, “Price” • Can improve peoples desire for a product and thus add value, e.g. Coffee, people pay a lot more for the Coffee than the ingredients it took to make it.

  6. What are the USPs of these products?

  7. How to create a USP • Brand Names: have persuaded customers that certain coffees are superior to others. • Images: created by advertising, e.g. “Lynx deodorant will make girls attracted to you” “Gold Blend image makes people want to relate to it” • Packaging: may enhance perceived quality. • Service Provided: People prepared to pay a lot more for the same meal in a restaurant than a take away. Pay a lot more for a coffee in Starbucks because of its attractive environment.

  8. http://news.bbc.co.uk/1/hi/programmes/click_online/8450385.stmhttp://news.bbc.co.uk/1/hi/programmes/click_online/8450385.stm A USP: The unbreakable phone!!

  9. Aero vs Dairy Milk Nestle Aero 46 grams Price: Cadbury’s Dairy Milk 49 grams Price: Which Chocolate bar has the most added value? What makes this chocolate bar have a higher added value?

  10. Why is adding value so important? • To survive • To be successful • To differentiate the product compared to competitors • The higher the added value the more likely a business will survive, grow and be successful in the long term.

  11. How would you add value to the following?

  12. BBC classroom clips – added value of cereals video • http://www.bbc.co.uk/learningzone/clips/added-value-in-processed-food/12268.html

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