Value added

In marketing, value added refers to the process, operation, product, or service that increases the worth of a good or service in the eyes of a customer. This is different from the economic term value added, which simply means the difference in the sale price of an item and the cost of production.

The concept of value added is very important in marketing because it acts an incentive for customers to purchase a product or subscribe to a service.

A simple example when value is added to a product is when a sampler product is given for free when another related product is bought, whether at a regular or discounted price (i.e. free small bottle of mouthwash for buying a jumbo-sized toothpaste).

Another example when value is added to a product is when an extra quality process, such as undergoing ISO certification, is done to determine superior product quality. In cases like these, the products that pass the certification get to put the ISO logo on the packaging to show the customers that the product is indeed of superior quality. Obviously, customers that are looking for quality over affordability will choose an ISO certified product over an ordinary one.

Value added services are a common marketing tool. In this context, value added refers to all the services a company offers that relate to its primary service. A good example would be the additional service phone providers offer. These value added services can include the ability to conference call, leave voice mails, play games, and go online, all on your phone.