ADDED VALUE AND HOW IT CAN BE INCREASED

• Added value is the difference between the selling price of a product and the cost of bought-in materials and components.
• Added value allows a business to cover other costs such as labor costs and management expenses.
• A business can increase added value by increasing the selling price or reducing the cost of materials.
• Increasing the selling price can be achieved by creating a higher quality image for the product or service.
• Reducing the cost of materials can increase added value, but it may affect the quality of the product.
• Customers may not be willing to pay the same price for a product they perceive as lower quality.