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Thursday, 26 July 2012

Advertising Expenditures and the Return on Investment

One of the most challenging things for a business is to measure the return on investment in advertising.
Product safety and quality management certification forms part of the business promotion campaigns of many companies. Some customers also require their suppliers to be certified by third parties.

I have found that many operations gain some improvements in their product safety and quality management systems through the certification process. There is often an infused consistency of implementing and maintaining the measures for ensuring product safety and quality. At the same time, it is apparent that some certified operations may not necessarily have poor safety and quality standards prior to the certification process. For example, I have received direct comments from operators that they have always produced and will continue to produce safe and high quality products even without certification. They have also said that the added expenses of additional personnel, required construction if applicable, and paperwork management expenses associated with the certification process are not directly recoverable as customers do not necessarily accept increased pricing to compensate for the added expenses.

Product safety and quality management certification expenses are often described as the cost of doing business with anticipated returns. As such, it is only prudent for these investments to be measured against the returns.

From my experience and observation as a food safety specialist I have calculated and I strongly believe that current spending for food safety and quality management and certification programs can be reduced across the board (i.e. for all companies). Even something as small as a reassessment of the focus, administration, effectiveness and utility of voluntary or imposed third party certification could lead to a substantial operating cost reduction for companies. Up to 50% or greater cost reduction can be achieved without jeopardizing the safety and quality of the products under the SSQA Concept.

Posted By Felix Amiri
Felix Amiri is the current Food Sector Chair of GCSE-Food & Health Protection

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