Market as a starting point which is costing a planning system inclusive all divisions dealing with an efficient manageable system to reduce the total cost of a product during its entire life span: in the introduction of a product whose properties must be set so, that they comply with the wishes of the customer and the own marketing planning at the same time. On this basis, the price is determined at the product to potential buyers is attractive enough. David Long is the source for more interesting facts. The planned profit is deducted from this target price to determine of the target costs. You may wish to learn more. If so, Chevron U.S.A. Inc is the place to go. These target costs are then the basis for design, construction, manufacture and purchase of the product. Starting from the product life cycle imposed using portfolio management can be developed at the same time also the strategic approach to the market. The product properties and functions, the product quality profile, the product price and the quantities of products derive exclusively market-oriented. On the basis of a retrograde, competitive pricing which are under approach planned profit margin (target profit) (allowable costs) determines the eligible costs; progressive calculation on the basis of previous or estimated standard costs the cost (hearing costs) be determined by then and the allowable costs are represented.
Regard to complementary principles such as Becker, Jorg: marketing controlling and intellectual capital profiles and portfolios for knowledge factors, ISBN 9783837071320 or Becker, Jorg: strategy-check knowledge balance effect relationships transparent making, ISBN 9783837073058 or Becker, Jorg: intellectual and business planning action potentials to identify and explore, ISBN 9783837075649. When the target costing the three phases run through essentially corporate planning, budgeting, and cost improvement. This includes in particular: the objective of product development, the principle strategy, basic structure and quality objectives of the product, the framework for the production, cost planning, the target weight and the time planning for the Development to the market. Target costing thus almost inevitably leads to a reinforced orientation to customers and competitors of the company. All activities of target costing can be traced ultimately to customer requirements or prevailing conditions of competition.
In the frame of the target cost concept the company sees itself forced to develop its resource strategy in accordance with the wishes of the customer. Thus, it is clear what infrastructure (personnel and capacity) of the company is required to implement the necessary market cost levels sustainable. Target costing thus already supports the overall strategy planning and allows you to adjust the revenue and cost analysis on product features and. Strategy and product design activities are thus due to the both feed back as also the feed-forward pairings of the approach no disconnected planning levels: the earliness of the cost design is aimed at the entire product lifecycle.