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Value management : A way to improve sustainable profit

Ajay Paralikar
26/12/2016 0 0

Not always addition of value leads to addition to cost.  Sometimes an entrepreneur can create value for the customer without any cost, even may be sometimes there is negative cost adds value. This means, the cost is saved for the value added.

For example, one of the toothpaste companies introduced salt in its toothpaste.  The cost of the salt is less than the cost of other material in the toothpaste. The total weight of the toothpaste was same, but some costly material was removed and salt was introduced. For this ‘salty’ toothpaste, the customer paid premium.

To perform some task is very easy for the organisation but is difficult for the customer. Performing this task for the customer, for very little or no cost creates value. One of the detergent company introduced blue in its powder. It reduced lot of task of the customer, to maintain stock of blue, use it for the cloths etc. The hassles were reduced at very low cost.

The objectives of the value creation mainly are, to attract the customers and encourage him to pay you more. More value in same price, or higher value in little more cost, is a win-win situation.

However, the entrepreneur should manage the value and cost. He should be futuristic for value addition. Because, for the first few times, the customer is delighted due to higher value. Then he becomes habitual of the higher value. The third stage is, it becomes his demand and right. With the air-conditioners in the cars customers were delighted.  Now, a car without air-conditioner will not be sold. It has become customer habit and right.

Proper plan to add values one by one will delight the customer time to time , and he will stick to your products.

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