Value Prposition

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Value proposition
From Wikipedia, the free encyclopedia
Creating a value proposition is part of business strategy. Kaplan and Norton[1] say "Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation."

Developing a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to itscustomers, prospective customers, and other constituent groups within and outside the organization. It is also a positioning of value, whereValue = Benefits - Cost (cost includes risk)[2].

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Strong value propositions are also expressed from the customer’s perspective and talk about the experiences and benefits that they will have when using the product.

[edit]Competitive Advantage

A product with a successful consumer value proposition is directly linked to a products actual and sustained performance versus competition. The two main attributes that allow consumers to differentiate among products are price and quality. Finding the correct balance between these two attributes usually leads to a successful product. If a company is able to produce the same quality product as its direct competition but sell it for less, this provides a price value to the consumer. Similarly, if a company is able to produce a superior quality product for the same or a slightly higher but acceptable price, the value to the consumer is added through the quality of the product. A product must offer value through price and/or quality in order to be successful.

[edit]Target Audiences

▪ End user - The initial and ongoing satisfaction of the end user is the goal of every business. Customer satisfaction is achieved when superior customer value is delivered. Establishing a lasting business relationship will lead to future sales. Price and
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