CH 3: Business competentcies

Question 1

Describe the concept of economic value modeling

Answer 1

economic value: is the value that a persons places on an economic good bases on the benefits they derive from it -> willingness to pay

• reference price: price at starting point
• value of added benefits: make an estimate of the monetary value of benefits and cost based on the reference of alternatives
• incentive to switch:switch over cost because they had to leave their supplier for another

Question 2

what is meant by the pocket price waterfall

Answer 2

Pocket price waterfall is the difference that occurs between the invoice price and the price that is actually payed by the client due to different discounts that are given by sales persons such as early pay discount, volume discount, rebate, frequent user incentives,..

Question 3

provide an overview of the basic financiel frameworks

Answer 3

galine colpaers frankrijk é

General cost classifiactions …. = manufacturars cost such as direct labor and direct materials cost but also overhead costs. non-manufacturars costs such as sales & marketing and administration

contribution reporting: allocating the differents cost to the particular product or product manager

• variable cost: cost of doing business
• fixed cost: cost of being in business
• direct cost
• indirect cost
• relevant cost

financial statement analysis; net present value, average rate of return, internal rate of return, payback

relevant costs

economic value modelling and pocket price waterfall

Question 4

describe the customer equity flow chart, how can increase customer equity

Answer 4

1) define the ‘best’ customer
2) create a value customer profile
3) attract new customers that fit the profile OR increase profitability with you current employees by
- longer relationship
- doing more business with them

Question 5

describe the customer equity flow chart, how can increase customer equity

Answer 5

1) define the ‘best’ customer
2) create a customer value profile
3) attract new customers that fit the profile OR increase profitability with you current customers by
- longer relationship
- doing more business with them