It answers one of the most important questions of
why a consumer should buy a product or use aservice from a given organization. This helps customers to make its decision for selecting theright product or service depending upon its value promised.Eg: Company like Tata Motors focuses on its value proposition of providing value for moneyproduct to its customer. Thus most of their statements come in the form of providing the bestservices in its class at lowest possible cost. It targets all the customers who are very priceconscious but wants as many as features possible.
is a promise of value to be delivered and a belief from the customer of value that will
Definition of 'Value Proposition'
A business or marketing statement that summarizes why a consumer should buy a product or use aservice. This statement should convince a potential consumer that one particular product or service willadd more value or better solve a problem than other similar offerings.
Investopedia explains 'Value Proposition'
Companies use this statement to target customers who will benefit most from using thecompany's products, and this helps maintain an economic moat. The ideal value proposition is conciseand appeals to the customer's strongest decision-making drivers. Companies pay a high pricewhen customers lose sight of the company's value proposition.
Characteristics of Strong Value Propositions
You must differentiate your
offer from your competitors’ offers.
You may match a competitor on every dimension of value except one.
You need to excel in at least one element of value.
In this way you become the best choice for your optimum customer.
There is a difference between the value proposition for your company and yourproduct. You must address both.Crafting a value proposition requires substantial reflection on what is unique about yourcompany and your products and services.
If you had just
to describe why people should buy from your
company instead of another’s, what would you communicate?