Date post: | 15-Jul-2015 |
Category: |
Business |
Upload: | matumit-sombunjaroen |
View: | 477 times |
Download: | 0 times |
ProductionPrice VS Cost
The Reasons why Production Cost is a Constant.
Matumit SombunjaroenV1.0 10APR2015
Let’s start with Pretext
“Production Cost is a Constant”
The contents of this slide will give reasons
and guide readers toward the said conclusion.
Final End Product
The rest of the slides will assume that
The End Product is fixed,
And the production is processed
to obtain the same result
Case Study
Although the concept is applicable to most goods and services.
Anime will be use as a case study for the sake of consistency.
Definition of Price
Price, is a quantitative worth of a product,
Defined by currency based numerical value
that the buyer and seller agreed to use
in the trading of the item.
I’m 7000Yen
I’m SO HYPED for this!!!
Definition of Value
I don’t get what’s so interesting about it?
Value, is an importance worth of a product,
Defined by the needs and wants of the Client
High Value here Low Value
Production Cost
Is the total Worth that need to be used
to create the Product
100,000,000 Yen 7,000 Yen
Production Assets
Production Cost is made up fromCombinations of Assets.
Cost do not simply equate to Money Spent
ProductionCost
Money
Time
Skill
Heart
Occurred Problems
There were numerous occasions when a Client,or a person with high authority, ordered a production
person to do things that are totally unreasonable.
Absurd commentsmade by Clients
Some Examples
If you don’t understand why these are absurd,
You are likely to cause headaches to
Production People even if you have no intention to do so.
Printed Material - “This is not the same Color I saw on my screen”
3DAnimation – “This movement is great, but can you make him a bit taller?”
Web Brochure – “This layout is perfect, could you make the font a bit bigger?”
The Cause
It’s usually becausethose people do not have the knowledge
regarding the production process.
Simply speaking,
The Thing is
It is the duty of PRto make customers understand production process
and prevent these kind of things to happen.
If A Client said things like that,
It’s totally reasonable
If it’s a thing along these lines,
Then it’s a totally serious matter
“2 Months!? I don’t care! Just deliver this next week!”
“A million!? This is stupid, I’ll pay 5k for this”
“Even if it’s cheap, I demand a quality work!”
The Agenda
Cheap, Fast, and High Quality
Is the Ultimate goal for a product
that any Client would seek
Cheap Fast
High Quality
The Ultimate Ideal
And
For Marketing reason,
Some Clients and Managers
are also likely to demand these
Just Do as I said
However
To explain thing easily,
It is logically impossible to obtain all 3!
Cheap Fast
High Quality
Here is the reason
As long as time is an infinite variable,
If someone can practically created something,
It is also possible for someone else
to create the same product
100 Yrs?
ProductionTime
Even when End Product is the same
A Creator with Higher Skill can
Use less time to complete the work
of the same quality
100 Yrs?
ProductionTime
Reduced Time
Or
If the available time is equivalent
A Creator with higher Skill
can produce a higher Quality Work
Summary
Price
Low QualityLong
Production Time
HighQuality
ShortProduction
Time
Low Quality
ShortProduction
Time
HighQuality
Long Production
Time
Summary
Pro
duction C
ost
Deficiency Cost fromLow Quality
HighQuality
Assets spent to achieve
High Quality
Assets
Time
Time
Assets spent to hasten Production
Time
Assets
LowQuality
Examples of Deficiency Cost
Customer’s lack of interest due toProduct’s Low Value
Schedule DelaysDue to Lack of Skills
Schedule DelaysDue to Outdated Tools
Low MoraleDue to various issues
The Root of the problem
If a person do not know about the production,
They are likely associate
the price range with the end product
100,000,000 Yen 7,000 Yen
The Result,
It will cause great stress on the Production People
As they are not paid appropriately
for the work that they have done
I’m not going to work anymore
The reason,
In Exchange for a Cheaper Price,
NEGATIVE EMOTION got stacked on
as a Deficiency Cost instead
Pro
duction C
ost
Assets
NEGATIVEEMOTION
PR
ICE
In the case of Outsource Work
Something like this can happen
OutsourceFirm
Client
I demand[Something outrageous]
….Fine…
Sometime Later
We really need helpon this!
Go find someone else
As a side Bonus
Production People in the same line of work,
Will also shunned away from the same client as well
OutsourceFirm
Client
That Client told us to [Absurdity]
We really need helpon this!
AnotherOutsource
Firm
We are sorry,But you have a really
bad reputation in the business
On the Positive Side,
It is possible to obtain Low Price
From Positive Heart Factors
Pro
duction C
ost
Assets
POSITIVEEMOTION
PR
ICE
Hey, I WANT to work on this!I don’t mind a Cheap pay!
We are friends aren’t we?I’ll help you on it
You really helped us that time,Here’s a discount
As an Example,
Crowd Funding work on the principle of
Utilizing Target Audience’s desire to obtain a Product
The Funding Obtained became part of Production Cost
Self Funding
Crowd Funding
Self Funding
Assets spentto obtain
Crowd Funding
However,
It should be noted that Positive Heart Factors
Is not a cheaply obtainable Asset
And YES, There are stupid people like the one above
I know that you will have to spent times and might go broke,But help me on this,
You just need to have a Heart in this!!!
If you can’t pay the Price,Stop wasting my time
As an example
Let say that the Management decided to invest on a new Software that can shorten work time
Done in 2Hrs
OldSoftware
NewSoftware
Done in 1Hrs
The Result
Even if the New Software is more effective.
Other factors need to be spent to obtain
the shortened Production Time
Research new Software Time
OldSoftware
NewSoftware
Purchase Time and Money
Learning and Practice TimeProduction
Cost
And Yes,
Upgrade tools will give better benefit in the Long Run,
But the need for continual updates
Will also likely come in the future
NewSoftware
Current Project Next Project
OldSoftware
Deficiency Factors
To Summarize all things
Even if the Production Price got changed,
They simply got replaced by other factors,
As such, To achieve the same End Product
Total Production Cost remain a constant