The Value And Cost Benefits

1840 WordsMar 7, 20168 Pages
1. In Part 1, The Company, Red Jett Sweets lists six “Ingredients for Success” (p. 251). For each ingredient, designate it as either a cost benefit or as a value benefit and discuss your reason for your designations. Support your answer with concepts from the text covering value and cost benefits. The textbook describes a value benefit as a characteristic related to the nature of the product or service itself. Things like quality, fashion, and reputation are elements that give a product or service value in the eyes of the customer and a cost benefit refers to the ways by which a firm can keep costs low for the customer (Katz, J., & Green, R. 2014 pg.195). Mobile Cupcakery is a cost benefit since the use of the food truck saves money by not incurring the expense for a brick and mortar store, and since the truck is mobile; it will also make the deliveries on route to its sales locations which eliminates the need for a separate delivery vehicle. Just Cupcakes is primarily a cost benefit, limiting Red Jett to a single product reduces inventory and the need for more equipment which would drive the cost of the cupcakes up. However this single product concept this can also be considered and value benefit by creating a clear brand identity. Top Quality is a value benefit, the use high-quality ingredients to make cupcakes from scratch gives consumers the appearance of a higher class product that is worth paying a premium for. Shipping is a value benefit not offered by many
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