Assignment 01

Task 01

McDonald’s is one of the best global foodservice retailer which has more than 32,000 local
restaurants serving more than 60 million people in 117 countries each day. More than 75% of
McDonald’s restaurants worldwide are owned and operated by independent local public. The
Company serves the world some of its favourite foods – World Famous Fries, Big Mac, Quarter
Pounder, Chicken McNuggets and Egg McMuffin. The history began with our founder, Ray
Kroc. The strong foundation that he established continues today with McDonald’s vision and the
commitment of our talented executives to keep the shine on McDonald’s Arches for years to
come. . Its head office is located in Oak Brook United States. McDonald’s Corporation is the
world’s largest chain of fast food restaurants, working worldwide in 117 countries with 400000
workers. It has 60 Million customers with 32000 restaurants worldwide. A franchisee, an
affiliate, or the corporation itself operates every McDonald’s restaurant. The corporations’
revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in
company-operated restaurants. Its net operating income for the year ended 2010 is $7.673
Billion. The type of the company is public.

Task 02

A. The importance of working capital management

Businesses live in a highly competitive world and competition develops anytime two or more
parties make every effort for a goal which cannot be shared. For example, supermarkets are in
rivalry with each other to give the greatest possible value for money items, and to offer the most
suitable selection of things for their clients. Businesses struggle in numerous ways.
One of the most prominent methods is over pricing. Within a market firms are challenged by
direct rivals. These are businesses that manufacture the same or extremely identical items.
However, most items are distinguished distinct in some manner. For example, while soap
powders may seem quite identical each will give some type of specific component that
distinguishes them different.
A direct rival is a firm that produces or sells a product or service that is the same or extremely
similar to another in the same market. Indirect competition comes when businesses fight for the
same amount of expenditure, yet they could be in separate sectors of the same market or in
distinct markets. Every expanding or a successful firm has some rivals. If we take an example of
McDonald’s and Burger King:
In creating an examination of McDonald’s, the first topic we will address is their corporate aims.
McDonald’s has a goal of one hundred percent complete customer satisfaction. They do
recognize that this objective is not always possible. If they are unable to accomplish that
objective for whatever reason, they are committed to taking whatever steps are necessary to
rectify their error.
McDonald's has a second corporate aim that differentiates them from the majority of their other
rivals in the industry. They have always considered it important to play a role in improving the
communities in which they live, and this is still one of their primary objectives. If we take a look
at McDonald's Guarantee, it claims that the meal will be served to you while it is still hot, and
that you will get service that is both quick and courteous. McDonald's provides service to a
single patron at a time as part of their customer service model. They care a great deal more about
the quality of the service than they do about how quickly it can be completed. Typically, staff
members will accept just one order at a time before beginning preparations on that order as
clients wait. They go to the next consumer after they have ensured the satisfaction of the one
they are currently working with. This method achieves high levels of accuracy and quality, but it
is painfully slow. It seemed as if the employees at McDonald's had little time for the customers
despite the rapid pace at which they worked. They behaved as if it were a chore for them to
pause what they were doing to respond to a straightforward inquiry or to refill a drink.
Inasmuch as Burger King's goal is to personalize the ordering experience for each and every
customer while maintaining the highest level of efficiency. Burger King's standard operating
procedure is to provide the consumer with as many options as possible and then to promptly and
precisely fulfill any request made by the customer. The company's tagline, which reads "YOUR
WAY, RIGHT WAY," is a reflection of this approach.
Keeping to this guideline makes it extremely simple for them to accomplish what they set out to
do. It is quite simple to personalize each purchase because to the many options that they provide.
The techniques that Burger King uses are also in line with their overall aims. In order to
personalize each meal, they provide consumers a wide variety of alternatives to choose from
when placing their orders. Fries or onion rings, cheese, bacon, mustard, ketchup, mayonnaise,
lettuce, tomato, pickles, and onion are some of the toppings that are available to choose from.
The consumer is free to choose any combination of these offerings that best suits their needs.
Continuously taking orders from customers is something that Burger King does. After having
their order taken by one of the workers, customers go farther down the line, where another
worker is responsible for making their food. In the meanwhile, the first staff is assisting another
client by taking their order. In addition, customers are given their own beverages to consume
while they wait for their meals. Since of this, service is significantly accelerated because staff
members do not have to prepare beverages. In addition to that, they offered clients the option of
listening to soothing music as they dined. Burger King has well in excess of what is required for
both communication and leadership. The staff members discuss the customers' orders with the
customers and provide comments. Every client gets a receipt, which enables them to verify and
make sure that their transaction was processed correctly. Before offering the client their food, the
staff members will also read the customer's order back to them. When it comes to leadership,
there is a manager who is in charge of organizing everything.
Objectives of the Organization Both McDonald's and Burger King have the same fundamental
organizational aims, which include maximizing profit, increasing sales volume, providing
service that is both prompt and pleasant, and maintaining a clean environment. Both businesses
have similar objectives, yet there are some minor distinctions between them.
Organizational Structure When compared, the organizational structures of McDonald's and
Burger King are very similar to one another when seen from an outside perspective. It seemed as
if there was a crew leader who was an employee in a position below that of a manager, and there
was also a manager who was present behind the counter. The management of the restaurants
seemed to have complete control over all aspects of the process involved in providing customers
with meals.
 B. Working capital management of both firms over the last three years

Technology When it comes to technological advancement, both McDonald's and Burger King
are among the leaders. Both of their kitchen appliances are equipped with built-in electric timers
and use cash registers that are at the cutting edge of technology. The manufacturing process is
the identical at both Burger King and McDonald's, despite the fact that the two restaurants use
quite different cooking approaches. After a large quantity of food has been prepared at once, it is
kept warm in the microwave or placed under heat lamps until an order is made for it. Both shops
are equipped with the same drive-through equipment, which consists of a speaker and a clearly
illuminated menu to communicate with the kitchen staff.

Motivation of Staff Members It is difficult to tell, although it seems quite evident, that the drive
of both businesses for their workers to do well in their jobs comes from the stores themselves. It
would seem that the individuals who work in these businesses have a lower social and economic
position, and the fact that they have a paycheck waiting for them at the end of the week could be
the only thing driving them to keep going to work.
Environment The atmosphere at McDonald's and Burger King seems to be one that is simple yet
chaotic at the same time. It is plain to see that the vast majority of the individuals who are
employed there are not picking their jobs because they want to make a career out of it. As a
result, the workforce is always shifting and adjusting to accommodate both newly hired workers
and novel circumstances.
The Art of Leadership Both shops' management teams followed a similarly collaborative and
supportive model of leadership. In order to accomplish what needed to be done, task orientation
was absolutely necessary. Because of the high volume of customers at various times of the day in
both locations, it was imperative that everyone give their whole attention to the work at hand. It
seems that management had little willingness to be flexible, especially when doing so would
entail surrendering their aims.
Both McDonald's and Burger King have been engaged in fierce competition with one another for
a number of years at this point, and there is no indication that it will end any time in the near
future. Because we are all aware that the economy is about to undergo a period of correction,
these two superchains are having to compete even more fiercely to earn customers' business and
triumph over all of their rivals. Even though Burger King's double cheeseburger is 30 percent
bigger than the one that McDonald's offers, the price of Burger King's double cheeseburger will
be reduced from $1.99 to only 99 cents, the company recently revealed intentions to lower the
price of the item. This indicates that they are not generating a significant amount of profit from
selling it. However, in order to succeed, they need to win over a greater number of clients and
prevail over their rival.

On the other hand, McDonald's is getting set to remove the double cheeseburger completely off
the dollar menu in the near future. The fact that the double cheeseburger sold in the shops at a
price point of $1.00 does not generate a profit for the majority of the franchisees who own those
businesses. Complaints have been lodged that customers will come into the shop, place an order
for two double cheeseburgers, and a glass of water, which would result in a loss of revenue for
the business as a result of that one customer.
Consumers might be encouraged to return to a particular fast food chain by providing incentives
such as special sandwiches and price reductions on certain menu items. This helps customers feel
more connected to the brand, which in turn encourages them to return. This strategy is quite
effective in attracting consumers, and as long as the economy continues to be precarious, we can
expect to see fast food restaurants come up with better offers and more innovative food products
in an attempt to attract customers.
They are always monitoring each other as well as the competition, and in the case of
McDonald's, they are making sure that Burger King does not cut into their market share, while in
the case of Burger King, they are seeking methods to cut into McDonald's market share. If we
compare McDonald's and Burger King from 16 years ago, we see that McDonald's average sales
per unit in the United States have increased by more than 20 percent, while Burger King's sales
have decreased by between 8 and 9 percent during the same time period. This is true despite the
fact that both companies have faced a number of obstacles during this period of time. Burger
King Operators have expressed frustration for years about the preparation of French fries.
Despite the fact that the corporation has experimented with numerous recipes over the last
several years, many professionals in the field believe that Burger King's fries are still not on par
with those offered by McDonald's.
Because of the correlations between profitability and product differentiation, it is clear that
McDonald's and Burger King would do better to steer clear of direct rivalry if the market region
in question was large enough. On the other hand, McDonald's and Burger King could share the
same building in less significant markets. On the other hand, Burger King's earnings consistently
go up whenever they differentiate themselves more. The equilibrium is determined by the size of
the market. McDonald's often locates its stores within a few hundred feet of the market's center,
whereas Burger King typically locates its stores on the periphery of the market. In bigger
markets, McDonald's and Burger King opt to situate their restaurants on opposing sides of the
market. However, McDonald's restaurants are often located closer to the ideal central location
than Burger King restaurants are.
One of the many contributors to Burger King's enormous amount of success is location, which is
also one of those contributors. But that wasn't their only strategy because they also had the
brilliant idea of going head-to-head with McDonald's across the street, which is one of the best
ways to explain it. Burger King has always found outlets where there is a large attention of
people, and this is one of the best ways to explain it. They ensured that customers would see their
franchise by positioning their stores either in front of or next to a McDonald's location.

Task 03

Part a

Tesco's internationalization strategy aims to match its products and services to each new country.
The company's introduction into South Korea under the label "Home Plus" enabled it to grasp
how the industry worked and customize its goods to match local needs (Corporate Watch UK
2004). Tesco's association with a Korean company helped them secure the best location for their
operation, which helped become South Korea. Tesco's second-largest market after UK Tesco has
continued to grow into new industries by using global business ideas.
Tesco localizes in most of its new markets, although its globalization goal in the EU isn't
universally embraced. The company is accused of unethical practices, such as setting prices
excessively low relative to the markup, to eliminate its competitors owing to its larger financial
strength (Corporate Watch UK 2004, p. 20). Tesco allegedly encouraged farmers in some regions
to avoid supplying to competitors so they could stay in business. The company continues to
employ local labor in its global markets but has been criticized for unfairly rewarding its
employees. In numerous of its developing countries, supply chain exploitation and a disregard
for ethical employment norms have tainted its purpose of buying locally made goods and hiring
local workers (Corporate Watch UK 2004). Malaysia has imposed new trade restrictions to curb
Tesco's growing influence in the nation.
Wal-globalization "Think globally, act locally" is Mart's attitude. Instead of just growing, the
company will alter its goods and services to meet local needs. This is Wal-projected Mart's
business strategy in South Africa after acquiring Massmart (PaperCamp 2011). In emerging
areas, the corporation uses a local strategy, but its business model remains low-cost leadership.
This business model has enabled it to maintain prices lower than most of its competitors,
contributing to its success in the American market. Wal- management's Mart's wants to buy Wal-
Mart Massmart's Mart is why.
Massmart's low-cost strategy appeals to Walmart by leveraging a low-cost South African
distribution network. Wal-Mart may keep its current strategy while gaining local experience and
established suppliers with Mass-Mart.

Part b.

Tesco's early expansion strategy focused on Eastern Europe and Southeast Asia (Corporate
Watch UK 2004). Although these nations were expected to have a relatively weak grocery
market, this did not materialize in France, where the firm tried to penetrate. In 2007, the
company entered the US, one of the world's most developed economies. Tesco is a unique
British grocery store since no other food business from its origin has expanded globally.
Tesco's strategy has been mostly successful since other retailers have failed in emerging
countries (Child 2002, p. 2). Tesco's market strategy centers on the internet, especially online-to-
house delivery. This method has helped the company achieve one of the fastest growth rates in
the business by selling non-food commodities in growing countries (Child 2002, p. 2). This
strategy helped the corporation grow non-food revenues by 18%. (Child 2002, p. 12). The firm's
nonfood sector currently comprises around 40% of its floor space. This development started in
Hungary in 1994, when the company began selling items online.
Tesco's online grocery business prowess has made them the market leader. TESCO's strong
internet grocery sales in the U.S. were made feasible by online home delivery utilizing Tesco's
database (Child 2002, p. 2). Some of the company's developing territories use a partnership
model related to internet sales. In China, the company partnered with Hymall, which operates
Shanghai hypermarkets (Wachman 2006, p. 1). Tesco may acquire half the company following
the 140 million pound deal (Wachman 2006, p. 1).
Whatever the company undertakes, it expects certain collaborations to pay off in a few years.
Tesco feels that leveraging some of its expanding markets as a single business may be difficult
(Wachman 2006, p. 3). Because of this, the company has had to seek new partnerships to
promote its products. Tesco and Hymall's relationship in China is so vigorously pursued that the
business has abandoned its US acquisition ambition.
Tesco partnered with Trent, a Tata group company, in India (Best 2008). Tesco's management
(quoted in Best 2008) confirmed this partnership (p. 6). Tesco will provide backroom support to
Tata's Star Bazaar hypermarket chain, allowing it to challenge India's retail chain industry from
two directions (Best 2008). Best (2008) says, "Open its own wholesale cash-and-carry firm to
provide small retail enterprises, restaurants, Kirana shops and other business owners with fresh
food, consumables, and non-food commodities" (p. 4).
The concept has only been utilized in emerging countries since Tesco feels that if it uses the
same methodology in established regions, such as the UK and US, it will face fierce competition
and the plan may prove unprofitable in the long run. One of the company's directors said the
company has focused more on new markets than established ones, including the U.S.
I don't think we should acquire an American firm. "We don't plan to buy a U.S. firm," he stated
(Best 2008, p. 7).
Wal-efforts Mart's to penetrate new markets haven't always been successful. The company's
failure in emerging regions may be due to its methodology. Its approach in emerging regions
includes buying successful retail stores. Massmart Holdings, South Africa's largest retailer, was
purchased for $4.6 billion as the company's next emerging market venture (PaperCamp 2011, p.
2). Observers call this the company's largest acquisition in a decade.
Massmart is South Africa's largest discount retailer, with most of its operations in Johannesburg
(a business strategy that Wal-Mart also possesses in America). Massmart's activities are similar
to Wal-in Mart's that they operate in over a dozen countries under several identities. Massmart
offers low-cost, high-volume outlets with a strong general retail operation supported by low-cost
distribution infrastructure, according to PaperCamp (2011). (p. 4). Wal-Mart uses this method in
the US and SA.

Assignment 02

Part a

The Ansoff Matrix is a fundamental framework taught in business schools worldwide. It is a

simple and basic way for visualizing the levers that a management team may pull when
analyzing growth possibilities. The X-axis denotes Products, whereas the Y-axis denotes
Markets.
Within the Ansoff framework, the concept of markets may have several interpretations. For
example, it might relate to an area or jurisdiction (such as the North American market) or to
customer segments (i.e. the target market/demographic).
The Matrix is used to evaluate the relative attractiveness and risk of development strategies that
employ both existing items and markets and new ones.
Management teams and analysts use the Ansoff Matrix, commonly known as the Product/Market
Growth Grid, to plan and evaluate expansion initiatives. Specifically, the instrument aids
stakeholders in understanding the risk associated with diverse development techniques...

Market Penetration
In terms of risk comparison, market penetration is the least hazardous strategy.
When executing a market penetration plan, management wants to sell more of its present
products in well-established markets where it has built relationships. • Increasing marketing
efforts or streamlining distribution operations are common strategies.
• Price reductions to attract new market segment customers
• Acquiring a competitor in the same market

Consider a company that supplies packaged consumer goods to grocery chains. Management
may seek to expand market share by changing pricing for a big store in order to get more shelf
space for its packaged food products as well as various brands of pet food...
Market Development
A market development strategy is the second-least risky choice since it does not need substantial
expenditures in R&D or product development. Instead, it enables a management team to use
existing products and present them to a new market. • Serving a certain consumer segment or
demographic objective • Entering a new domestic market (international expansion)
Lululemon's management opted to aggressively expand into the Asia-Pacific region in order to
provide its already very popular athleisure products. While establishing a marketing and logistics
infrastructure in a foreign market has inherent risks, the fact that they are selling a product with a
well-defined strategy mitigates those risks...
Product Development
A business that has the full attention of a certain market or target audience may strive to grow its
market share among those clients. Consider it a play on brand loyalty, which may be achieved in
a variety of ways, such as: • Investing in R&D to develop a totally new product (s).
• Acquiring the manufacturing and distribution rights to a competitor's products (s).
• Creating a new offering by branding a white-label product made by a third party.
An example would be a beauty firm that manufactures and sells hair care products that are
popular among women aged 28 to 35. They actively invest in the production of a new range of
hair care products with the hope that the present target market would embrace it in an effort to
leverage on the brand's success and loyalty with this demographic...
Diversification
Diversification is often the riskiest attempt compared to others, provided that both product and
market expansion are required. While it is the strategy with the highest degree of risk, it may
deliver tremendous benefits - either by generating whole new revenue streams or by reducing a
company's reliance on a single product/market fit (for whatever reason).
Management teams often evaluate two kinds of diversification strategies..:
1. Related Diversification – Where possible synergies may be established between the current
firm and the future product/market.
A maker of leather footwear who decides to produce leather automobile seats is one example.
Obtaining raw materials may provide synergies, but the product and production process may
need major R&D and manufacturing expenses...
2. Unrelated Diversification – Where actual synergies between the existing company and the
new product/market are unlikely to develop.
Let's explore the situation of the leather shoe company. Consider that if management want to
reduce its reliance on the (very cyclical) consumer discretionary high-end shoe industry, they
may make a major investment in a consumer packaged goods product in order to diversify...
Ansoff Matrix and Financial Analysis
The misconception that financial analysis is a solely quantitative undertaking is widespread. And
although it's true that analysts must be able to analyze assets and liabilities, read through 10K
filings, and build financial models, it's also essential that they understand the drivers of corporate
growth, since they will affect a number of model assumptions.
The capacity of world-class analysts to translate qualitative data from a SWOT or PESTEL
analysis, an Ansoff Matrix, or Porter's Five Forces framework into model assumptions
distinguishes them.
As growth drivers may have a substantial impact on valuation estimates and key credit
indicators, a high degree of due diligence needs the ability to properly identify them.

Due to its grid-like appearance, the Ansoff Model is often referred to as the Ansoff matrix. It
supports marketers in recognizing opportunities to boost a company's revenue by developing
new products or "penetrating" new markets. Therefore, it is often known as the "Product-Market
Matrix" as opposed to the "Ansoff Matrix."

Due of its focus on expansion, the Ansoff Model is among the most widely used marketing
models. It is used to examine opportunities for firms to increase sales by exhibiting different
combinations of new markets (i.e. consumer groups and geographic areas) against products and
services using four methodologies...

Part b

A business model describes how a company will generate value. In the end, it diminishes the
business's potential to its essence. A business model gives answers to fundamental questions
about the problem We will address, how We will solve it, and the possibility for market growth.
Whether We are establishing a new firm, entering a new market, or adjusting the go-to-market
strategy for ABC Product, it is essential that we develop an effective business model. A business
model may be utilized to capture critical assumptions and evaluations of the opportunity in one
area, therefore outlining the road to success.
The establishment and improvement of our ABC Product strategy need both business models and
business strategies. We often use both while exploring a new business initiative, but each serves
a specific purpose.
A business model is the foundation of ABC Product's company and its products. It summarizes
the fundamental premise of how the ABC Product company will generate revenue. A business
plan is a document that describes in further detail how We will implement the business strategy.
The business plan for ABC Product will most likely include the company's goals, the resources
and strategies for achieving those objectives, as well as anticipated timelines and financial
performance. Together, the business model and business strategy for ABC Product establish the
intended value and delivery method for the product.
There are innumerable examples of business models from which to choose, and the optimal
business model for each company will vary dependent on the industry in which it operates and
the problem it attempts to solve for ABC Product customers.

Certain business principles are more widespread and successful in certain industries. For
example, Software as a Service (SaaS) companies often use subscription and freemium business
models. This makes software more accessible to customers and generates vital recurring revenue
for the company. In contrast, several social media networks use hidden income business tactics
to generate revenue via advertising. By providing free access to the whole platform, these firms
attract more customers. In turn, this increases the audience's value for advertising purposes.

It is also essential to examine the business models used by ABC Product's competitors. Consider
that the competitor of ABC Product has a subscription-based business model with no optional
features. If We offer a freemium model, We may be able to attract new consumers (including
some of ABC Product's rivals' customers) who want to try a product for free before purchasing it.
In this situation, choosing a different business plan than ABC Product's rivals might be
advantageous for ABC Product's company.
In the end, the ideal business model for ABC Product's company is determined by what is best
for ABC Product and its customers. Developing a business model needs extensive research,
planning, and analysis, regardless of whether a business model example template is used or one
is created from scratch...

Part c

Market research is the process of gathering information about ABC Product's target market and
customers in order to confirm the success of a new product, assist in the iteration of an existing
product, or comprehend brand perception so that the ABC Product team can effectively
communicate the company's value.
Market research may answer a range of questions about the state of an industry, but it is not a
crystal ball from which marketers can gather information about their customers. After studying
several industry categories, it may take weeks or even months for market researchers to produce
an accurate picture of the company's environment.
By investigating just one of these categories, we may be able to get a better knowledge of who
the customers of ABC Product are and how to supply them with value that no other firm
presently offers.
Certainly On the basis of ABC Product's industry experience and its present clients, we can make
sound judgment calls. Keep in mind, however, that the benefits of market research extend
beyond these strategies. There are two factors to consider.. 
Competitors of ABC Product also have seasoned industry professionals and customers. It is quite
probable that ABC Product's current resources are, in many ways, equivalent to those of its
competitor. Obtaining answers from a larger sample size might be advantageous.
Customers of ABC Product do not reflect the sentiments of the overall market. They mirror the
sentiments of the market segment that is already drawn to the ABC Product brand.
As 2022 approaches, the market for market research services is developing rapidly, reflecting a
healthy interest in market research. The market is anticipated to expand at a CAGR of 5% from
around $75 billion in 2021 to $90.79 billion in 2025.

Part e
Obtaining sufficient capital is one of the largest obstacles businesses confront. Incorporate a
considerable margin for contingencies and the unexpected into ABC Product's financial
predictions when launching the firm on the basis of a new product or service.
It is inefficient to invest in a new product or service and then run out of money before the ABC
Product firm takes off. Learn how to choose the suitable finance for a company.
Analyzing the costs of developing new goods and services
Following the development and testing of the new product or service concept for ABC Product, a
comprehensive business analysis will be necessary. This process stage facilitates:
• determine the costs related to the development
• estimate potential income generated by the ABC Product product or service

When doing an enterprise analysis, we should:

• estimate the cost of ABC Product, including any reductions or suggested retail price
• calculate the complete market potential for ABC Product
• estimate sales volume and likely profits
• identify the moment of break-even for ABC Product
• assess the whole product lifecycle of ABC Product on the market
A thorough business analysis may help us determine how much cash we may need to raise or
borrow to manufacture ABC Product, as well as the anticipated return on investment.
Expense management for product or service development
In order to avoid expenditures from spinning out of control throughout the creation of new
products and services, it is essential to maintain a close eye on the budget. We need to:

• estimate upfront development costs

• monitor costs throughout the design process
• create staggered investment - for example, release cash for each new development stage only
after the previous stage has been successfully completed.
There are two major approaches to cost estimation:
• a top-down approach in which comparable historical endeavors serve as a benchmark
• a bottom-up technique in which all team members agree on the expenditures they expect to
spend with a single project manager, who then calculates the total cost
Consider that ABC Product costs may include labor, materials, technology, product design,
market research, prototyping, and overhead costs.
It is vital to carefully plan every investment and control ABC Product's costs. Before making
investment decisions, consider how much the ABC Product company stands to earn from the
new product or service. Compare this to any dangers we may experience.

Part f

1. Identify the benefits

Determine which characteristics of a product may be seen as benefits by customers. This may
include characteristics that affect the usability of a product, access to information, the success of
a service, or the advantages of owning a thing. Consideration of a product's benefits may assist in
establishing its customer value by showing the product's positive characteristics and purchase
incentives. Here are some potential advantages: In order to determine a product's consumer
value, we may examine its qualities.
 Product's appearance and quality
 Company membership
 Ease of transportation
 Contribution to issue resolution
 Long-term takeaways
 User experience
 Customer support availability
2. Consider the costs
Identify the costs that a product puts on customers. The costs of a purchase might include the
consumer's time and money spent getting to the shop. Consideration of a product's pricing may
contribute in establishing its customer value by highlighting characteristics that consumers may
view adversely. When a customer acquires a product and realizes that the costs are high, they
may go elsewhere for a similar product with better benefits.
Here are some possible expenses that a product may impose on customers:
 Price of the item
 Installation cost
  Transportation to and from a place of purchase
 Maintenance expenses
 Usability
 Time required to use the product
 Renewal charges
3. Use a customer value equation
Utilize a formula to assess an item's consumer value. Customer Value = Perceived Benefits /
Cost is a common formula used by businesses to determine customer value. Therefore, after
identifying the benefits and costs of a product, We may divide the benefits by the expenditures to
get the customer value. Due to the fact that some goods may have non-numerical benefits and
prices, the equation is most useful when comparing benefits to costs and identifying which
category has more characteristics.
For instance, if we were to assess the consumer value of a handmade woven blanket, we would
identify the benefits as comfort, warmth, and design, and the costs as time and labor. In this case,
the handwoven blanket has a positive customer value since its benefits surpass its costs..

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