Trish Ria Jack Board Door TEACHERS DESK Nice Asil Nasir Joe Imran Radu Friday, 09 November 2018 Board Door TEACHERS DESK Nice Aditya Shuyeb Mulki Brijesh Asil Balween Trish Ria Nasir Edmond Anthony Harry Simran Joe Imran Radu Jahangir Samuel Bonnie Rabbab Shamar Maruf 1005-1007 - Taking a seat and starting – 2 minutes Rahat Yassir Yugesh Mason Jack Charlotte Lidia Adding value

Start of lesson drills Planner on the desk Pen/stationary available Friday, 09 November 2018 Start of lesson drills Planner on the desk Pen/stationary available Exercise book open on the desk Date copied from the presentation Title copied from the presentation: 1.1.4 Adding Value – chocolate case study Ready to learn  1017-1018 - Reminder Adding value

Friday, 09 November 2018 Expectations Be in the right place, at the right time doing the right thing: Be respectful of others and allow them to learn Complete all homework tasks set and come to me if you have any problems completing it Respect all school equipment Bring the correct equipment (pens, books etc.) to our class Act as respectable young adults like business individuals Reminder Adding value

Friday, 09 November 2018Friday, 09 November 2018Friday, 09 November 2018 Added Value Adding value

Show me the answer! Starter Friday, 09 November 2018 Write the Q no. and True or false on your board Q Question True/False 1 Marketing is about finding out your customer – who, where what they like, what else they buy 2 The main purpose of business is to provide taxes for the government 3 The following resources are needed to a make a cake – TV advert, taxes 4 Data you can count is qualitative 5 Focus groups are group of people brought together to talk about a product/service Adding value

True-Use primary and secondary research Friday, 09 November 2018 Q Question True/False 1 Marketing is about finding out your customer – who, where what they like, what else they buy True-Use primary and secondary research 2 The main purpose of business is to provide taxes for the government False – To provide goods and services for a Profit 3 The following resources are needed to a make a cake – TV advert, taxes False – ingredients, labour 4 Data you can count is qualitative False - Quantitative 5 Focus groups are group of people brought together to talk about a product/service True Adding value

Using secondary research is always reliable Friday, 09 November 2018 Q Question True/False 6 Using secondary research is always reliable 7 Primary research is the best research 8 Market mapping solves your business problems 9 Adding value is the increase in worth that a business creates, it includes its profit 10 You can use branding to add value Adding value

Using secondary research is always reliable False Friday, 09 November 2018 Q Question True/False 6 Using secondary research is always reliable False 7 Primary research is the best research False – Can be bias or not valid (wrong samples/not enough asked), expensive 8 Market mapping solves your business problems False – it is a help but SUBJECTIVE 9 Adding value is the increase in worth that a business creates, it includes its profit True 10 You can use branding to add value Adding value

Friday, 09 November 2018 Lesson Objectives Understand the meaning of the term ‘added value’ and explain its importance in businesses survival and success. Appreciate the main sources of added value: Convenience and speed Branding Quality Design unique selling point (USP) Adding value

Friday, 09 November 2018 Key Terms: Added Value- The increased worth that a business creates for a product, it is the difference between what a business pays its suppliers and the price that it is able to charge for the product/service. Unique-Selling Point (USP)- A characteristic of a product that makes it different from other similar products being sold in the market such as design Adding value

Friday, 09 November 2018 Adding value

Friday, 09 November 2018 Added Value Kamran knew there was no point in trying to compete against industry giants like Cadbury, Mars and Nestle. Products like Yorkie, Aero, Mars Bar and KitKat had massive sales. They were backed by a strong brand image and millions of pounds of advertising and other types of promotion. These chocolate products also had the advantage that they were available widely and in every newsagent and garage shop, not to mention supermarkets. Who would want to sell a different product from an unknown business in their shop? Adding value

Friday, 09 November 2018 So Kamran had to find a way of adding value to any product he made. Added value is the increased worth that a business created for a product. For example, a food manufacturer might sell a single chocolate bar for 20p. It pays 5p for the ingredients such as cocoa and sugar, as well as other costs such as the electricity to power machines. It would then add 15p of value for each bar sold. For the business as a whole, it is the difference between the total value of its sales and what is has to pay its suppliers, sometimes referred to as the ;bought in’ costs. Adding value

Friday, 09 November 2018 Sources of added value The challenge then for Kamran was to find a product where he could charge more than it would cost him to buy in the raw materials to make the product. He knew that there were many products that were very successful at adding value and that part of their success was in persuading customers to pay the price charged. Adding value

Friday, 09 November 2018 Example A pair of Nike trainers, for example, are pretty much the same as non-branded pair of trainers. They are probably made by the same people in the same factories somewhere, in a country like Indonesia or Vietnam. Somehow, Nike has managed to persuade customers to pay four or five times as much for their trainers as for the non-branded ones. Were they four or five time the quality? Probably not. The real different was in that fact that the Nike trainers had the famous ‘Swoosh’ on them and that is what added the value. Adding value

Main sources of added value: Friday, 09 November 2018 Main sources of added value: Kamran decided that the only way to do this was to make high quality, specialist chocolates. These would be sold to restaurants, by mail order and to specialist patisserie (cake) shops. Where would be the main sources of value added in this product? The would be thee same as for any business.: Quality Design and formula Convenience Speed and quality of service Branding USP Adding value

Friday, 09 November 2018 Adding value

Friday, 09 November 2018 Quality The quality of his chocolates would be very high. They would therefore appeal to a relatively small group of people who were prepared to pay a high, premium, price for the product. Adding value

Friday, 09 November 2018 Design and formula All Kamran’s chocolates would be hand-made. They would have a design distinctive from the sort of chocolates found in chocolate selections. They would also have unique formulations. So his chocolates would taste different to the chocolates made by any other manufacturer. Customers would therefore be able to see that the chocolates they were buying and eating were very different. Kamran could also do a design which related to different restaurants and patisseries, so that they would be even more unique. Each restaurant or patisserie would have its own chocolates’ with its name or logo on them. Adding value

Friday, 09 November 2018 Convenience For restaurants and patisseries, buying his chocolates would mean they did not have to product their owner chocolates for sale. A restaurant, for example might want to have a single chocolate to accompany a coffee. Rather than making the chocolate itself, it might be cheaper and easier to buy in these chocolates. For patisseries, it might make all its own cakes, but sell a variety of high quality goods made by other manufacturers. It is more convenient and cheaper to buy in these extra goods rather than making them themselves. The addition of the individual design or logo would be an even better selling point. Adding value

Speed and quality of service Friday, 09 November 2018 Speed and quality of service In today's world, customers expect high quality service. A business, for example expects its suppliers to meet tight delivery schedules. They are prepared to pay a higher price to suppliers that can deliver more quickly than other suppliers or be flexible in responding to customer needs. For example, in London, Kamran would offer next day delivery for orders. Outside of London and for mail order, he would offer 48 hour deliveries. Adding value

Friday, 09 November 2018 Branding Over time, Kamran would aim to create a strong brand for his chocolate products. Creating a bran means creating a distinctive product that stand out from those of competitors. The brand image would be one of a high quality, luxury product. Whenever people saw or heard of Kamrans chocolates, these would be the things that they would associate them with. Adding value

Unique Selling Point (USP) Friday, 09 November 2018 Unique Selling Point (USP) A Unique selling point, or USP, is a characteristic of the product that makes it different from other similar products being sold in the same market. The unique selling point could, for example, be the design, quality or level of service associated with a product. Adding value

Friday, 09 November 2018 For Kamran, the unique selling point had to be the distinct quality of his chocolates. This was the one things that no other business could copy easily. Very few businesses produced such high quality chocolates as he intended to make. Their chocolates be different in terms of taste and design from his chocolates. Adding value

Friday, 09 November 2018 WATCH OUT! Added value is the difference what a business pays its suppliers and what it receives for selling its products. The workers of a business add value to the output of a business. Adding value

Friday, 09 November 2018 WATCH OUT! A product may have more than one unique selling point. There could be several ways in which the product is different to other products on the market. Adding value

Importance of value added Friday, 09 November 2018 Importance of value added Every business, including Kamran’s, must add value to survive and be successful. If Kamran paid £12 for his ingredients and sold his chocolates for £10, he makes a loss of £2. If this were to continue, he would be forced to close. Adding value

Friday, 09 November 2018 How to be a success The most successful businesses are the ones that can achieve high levels of value added for the type of product that is being sold. If Kamran can sell his chocolates for £20 when the cost of ingredients is £12, then he has added £8 in value. However, he would be more successful if he could sell his chocolates for £30 when the cost of ingredients is £12. Then he has added £18 in value. The higher the added value, the more likely it is that Kamran’s business will survive, grow and be successful in the long term. Adding value

How has Jaki added value? Friday, 09 November 2018 How has Jaki added value? http://www.bbc.co.uk/news/business-34426989 Adding value

Friday, 09 November 2018 Plenary Adding value