What is the added value?
The added value refers to some type of other motivation or improvement offered by the manufacturer to attract consumers' attention. In the end, the aim of offering goods or services added is not only to build consumers recognition, but also to motivate consumers to buy these products and become loyal customers. This type of approach or strategy can be used to stimulate the sale of existing products or to launch a new product and create a viable customer base earlier than later.
In many examples of added value products, the manufacturer provides the customer with some additional incentive to buy. For example, a company that produces candies can increase the size of the bar, so it is ten percent larger than the candies offered by competition. At the same time, the manufacturer maintains the same price. The customer is pleased because he gets more candies without paying additional costs. Manufacturer benefits from increasing sales volume, which helps compensate for slightly lower profits achieved in selling everylonger units.
A competitive advantage achieved when using a value added strategy can be significant. New businesses that want to get a market share as soon as possible can add some other advantage that is not available for products that are already on the market. This is often the case with household cleaners, in that newer products would include higher concentrations of cleaning ingredients or included some kind of pleasant fragrance that was not available in competitors' products. At the same time, the price for the product would match or even slightly lower than products offered by other businesses. Here the customer benefits from buying a product that is better cleaned, leaving the house a nicer smell and still not spend some extra money.
To find out how to create some motivation with added value that attracts customers, businesses often rely on field research to find out what to consumeThe summer really wants. By conducting surveys, conducting controlled tests with certain demographic customer data and considering feedback and designs of existing customers, it is possible to find ways to produce a good product even better, often with low additional costs. If improvements actually become acquainted with consumers, the final result is a higher degree of evaluation of consumers, increased sales and generally greater financial stability for the company that produces the product.
The value added concept also applies to general finances and economics. For example, businesses often pay so -called value added tax, tax collected at the selling price of goods and services. Analysts also use a calculation called the monthly value added index by the Nebovov. This calculation makes it possible to assess the revenue obtained by the investor from one period to another, and thus evaluate the performance of the fund administrator at the same time.