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Adding Value

Why does the same bottle of water cost more on the beach? Learn how businesses add value through convenience, branding, quality, design and a USP.

⏱️ 15 min 🎯 13 activities Teachers Not yet rated Students Not yet rated

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What you'll cover

What is adding value? 💎

A bottle of water is nearly free from a tap, yet costs £2 from a kiosk on a hot beach. The kiosk has **added value**. Adding value means making a product worth **more to the customer** than the cost of making it. The bigger the value added, the more profit a business can earn.

Value added = price - inputs 🧮

Value added is the difference between the **price** a customer pays and the **cost of the inputs** (raw materials and bought-in parts) used to make the product. **Value added = selling price - cost of inputs.**

Work it out

An interactive activity.

Five ways to add value 🏷️

A business can add value in several ways: - **Convenience**: saving the customer time or effort. - **Branding**: a trusted name people will pay more for. - **Quality**: a noticeably better product. - **Design**: an attractive look, feel or function. - **USP**: a unique selling point no rival offers.

Match each method to an example

  • Convenience
  • Branding
  • Quality
  • Design
  • A ready meal that saves the customer cooking time
  • A trusted logo people will pay more for
  • Premium ingredients that make it noticeably better
  • A sleek, attractive look and feel

Name the method

A bakery wraps its bread so customers can grab it and go without queuing at a counter. Which method of adding value is this?

  • Convenience
  • Branding
  • A USP
  • Quality

Ways to add value

Select the TWO things that would add value to a product.

  • Building a strong, recognisable brand
  • Making the design more attractive
  • Switching to cheaper, worse raw materials
  • Copying a rival exactly with no unique feature

Why bother? 📈

Adding value lets a business: - charge a **higher price**, - earn a **bigger profit margin**, - **stand out** from rivals, - build **customer loyalty**.

Choose how to add value

An interactive activity.

Match each method to how it adds value

  • USP
  • Convenience
  • Branding
  • Quality
  • Offers something no rival can match
  • Makes the product quicker or easier to use
  • Builds recognition and customer loyalty
  • Makes customers willing to pay a premium

Value added again

An interactive activity.

Adding-value frame

Adding value means making a product worth more than the _____ used to make it. Businesses add value through methods like _____, quality, design and a _____. This lets them charge a higher _____ and earn more profit.

inputs branding USP price profit discount packaging copying

The jargon

What does USP stand for in business?

  • Unique selling point
  • Usual sale price
  • United sales plan
  • Universal service policy