BS-Business activity, page no 6-7 #BS #Businessactivity

What added value:

Added value refers to the increase in worth that a business creates for a product or service during the production process. It is the difference between the selling price of a product and the cost of the raw materials or components used to produce it. Added value can come from various sources, such as improving the product, enhancing the customer experience, or effective branding.

The importance's of added value:

• Increased Profit Margins: By creating added value, businesses can charge higher prices than the cost of raw materials and production, resulting in greater profit margins.

  
  

• Competitive Advantage: Added value differentiates a business’s products or services from those of competitors, making customers more likely to choose their offerings over alternatives.

  
  

• Customer Loyalty: When businesses add value through quality, branding, or service, they foster customer satisfaction and loyalty, leading to repeat purchases and long-term relationships.

  
  

• Improved Brand Image: Value-added products or services enhance a brand's reputation, helping the business to be seen as high-quality or premium.

  
  

• Ability to Reinvest: Higher profits from added value allow businesses to reinvest in innovation, technology, and employee development, further strengthening their market position.

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