23C : Added Value

Question 1

What is added value

Answer 1

• When companies add value to the raw materials it uses in the production process e.g. Fruit juice company processes freer ingredients (fruit ,vegetables yogurts

Added value is found in the difference between the cost of purchasing raw materials and the price at which the finished foods Are sold for.
Formula:

Selling price - bought in good and services = added value

Question 2

What are the ways to add value

Answer 2

• Brand a product

• Deliver excellent customer service

• Add products features an benefits that customs want

Question 3

What are the benefits to added value

Answer 3

• charge higher prices = higher profits

• separate the product from rivals

• Protection if competitors lower prices = keep the same market share