How Businesses Add Value

Added value is the reason why companies can sell their products for more than they cost to produce. There are 5 methods a business can use to add value and make a product or service more appealing to the customer. By adding value through these methods, the business is incentivising customers to purchase the product, which in turn increases their revenue.

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Convenience

Convenience is the first way a business can add value to a product. Here's a simple example of how a business can add value through convenience. A full watermelon cost roughly £2.99 in the UK. You buy it, take it home, chop it up and eat it, job done.

However, a business can add value to that watermelon by removing the rind, chopping it up into small cubes and putting it in a pot with a small plastic fork. That Watermelon has gone from costing roughly 50p per Kilogram to costing £5.40 a kilogram which is a 10x increase for the same product.

By removing the rind, chopping the watermelon, and packaging it in a ready to eat package the business has made the product more convenient for the end consumer. The customer does not have to chop up the watermelon themselves, it can be carried easily in a bag and eaten on the go by busy people or by a child as a snack. By making the product more convenient for the customer the business can charge a premium for the watermelon, which increases profit margins on the watermelon.

Branding

Quality

Design

Unique Selling Point