ShmoopTube

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And finance Allah shmoop How do companies add value All

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right people think about the way people improve things Give

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him you know that little extra Take ice cream Ice

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cream is good but a Sunday is better The ice

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cream palace charges four dollars fifty cents for two scoops

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of ice cream but take those same two scoops and

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add whipped cream chocolate sauce A handful of knots Bunch

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colored sprinkles plunk a cherry on top Now they can

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charge seven dollars fifty cents rights three dollars more Why

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while they added value the whipped cream chocolate and sprinkles

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make the tree way more special If Little Billy doesn't

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get his sprinkles or his cherry on top well he's

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going to throw a fit He's going to cry and

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stomp his feet and generally make more than three dollars

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of misery for his parents They might not think the

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extra three bucks worth the stuff is worth the three

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additional dollars it takes to turn ice cream into a

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Sunday there But they definitely think it through the day

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without a temper tantrum is worth those three bucks so

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they fork over the money and it's likely all those

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extra toppings cost the ice cream servers way less than

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three dollars It was ah high margin product costume maybe

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twenty five cents Fifty Send something like that huge contribution

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of profits when they add on those three bucks worth

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of stuff Okay next up What about water Well water

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is fine It's cheap It keeps you alive But give

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it that little extra and water becomes a health hydration

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beverage Take water from the tap basically free Now add

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some vitamin C powder Mix in some artificial blueberry flavor

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and a little coloring Put it all in a bottle

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and then slap a label on it Now you've got

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Big Paul's bonus Health Hydration Beverage Five dollars seventy five

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cents for a twelve ounce bottle Big value added big

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profit margin to the cellar Well the concept of value

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added describes the amount you increase the utility or the

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quality or the value of a product to the buyer

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through whatever process you deploy you get a product or

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some raw materials You do something to it It gets

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more useful or at least it gets generally better In

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some way you've added value to it Turn warm secretions

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into silk turns Silk thread in the fabric Turn silk

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fabric into sheets You silk sheets to help give the

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honeymoon suite at the Paluch a Ville Interstate Motel six

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Cinderella Lodge It's special charm adding value all the way

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at a back flap Toe prospector underwear There we go

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Put satellite radio in your car Gee that's a good

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one Add color to an old movie Good turn Pig

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snouts and pigeon spleens in tow Hot dog Dodger Dogs

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Put a bow on a puppy All value added situations

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Or send Billy to stay with his grand parents for

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the weekend so they can deal with his ice cream

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addiction for a couple of days You know good luck

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with that Definitely something his parents would consider value added

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grandparenting Yeah can

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