Approaches to the management of target cost oriented to market prices and the consumer value of product

Abstract

Purpose: the authors develop the organizational and methodological approaches to adaptation of the target costs management concept in economic entities. Discussion: the authors disclose functions and characteristics of the target-costing model as a concept and tool for target costs management. The authors establish the interaction of target-costing with the product life cycle theory. The authors offer to use this interaction to reduce costs with a focus on market prices and the consumer value of the product. Results: the authors developed the organizational and methodological approach to the application of a holistic concept of target cost management in economic entities. In addition the authors identified the possible problems and risks.