Core Function—Costs: Which Costs Are Relevant for Decision-Making?

Summary Costs are generally described as the value input for service provision in a company. The fundamental importance of functional cost management has been conceptually examined on a broad scale. Some contributions underpin the finding that the application and design of various cost management tools, such as target costing or activity-based costing, as well as the methodological aspects (individual forms of cost planning) are particularly important. Cost management can obviously only be successful if, on the one hand, the reasons for cost causation (e.g., by customers, processes) are known and comprehensible and if this enables active control and influence, for example, in the sense of value-oriented target achievement. A short-term approach to effective cost management often contrasts with a more long-term approach to innovation, which is intended to increase customer value and thus ensure the company’s future survival. A deterioration in the economic, market-related conditions in the sense of increasing competition can often be accompanied by a decline in sales and earnings at constant costs and increase the pressure on companies to invest in the right, valuable customer relationships, so that precise cost monitoring and influencing becomes necessary. The relevant costs of customer value orientation are costs that pursue a specific objective (building, maintaining, and regaining a profitable customer relationship). Creating cost transparency and classifying the perception of costs from the perspective of consumers and companies are essential cornerstones of customer value-oriented cost management. In this context, particular attention is paid to how fixed costs influence consumer and management decisions.