Adding Value Example

• A pencil performs the basic function of making marks.
  • It has several product features that enhance its functionality.

• Use the table below to determine where to add value to the pencil.
  • Assign a numerical value to the correlation between product function and product component.
    • For example: 5 for high; 3 for medium; 1 for low.
  • Assign a numerical value to the importance to consumer column.
    • Use a customer survey to obtain these numbers.
  • Multiply importance to customer by the correlation.
  • Compute the costs of each product component.
  • Compare computed costs with weighted product component.

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© 2008 John Michael Pierobon

Notes