October 2008

Value Proposition

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Business Blueprints™

Customer Expectations

What does every customer want when making a purchase?

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Business Blueprints™

Customer Expectations

What are you looking for when you go to buy a car, a television, computer, house,….?

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stankirkwood.com 4 .Business Blueprints™ Customer Expectations You want the greatest return on your investment Copyright: www.

stankirkwood.com 5 .Business Blueprints™ Customer Expectations What is Return on Investment from a customer’s perspective? Copyright: www.

stankirkwood.Business Blueprints™ Value Proposition Value Proposition Copyright: www.com 6 .

Business Blueprints™ Value Proposition “What the customer gets for what the customer pays .stankirkwood.com 7 .” Wikipedia Copyright: www.

stankirkwood.com 8 .” Investopedia Copyright: www.Business Blueprints™ Value Proposition “A business or marketing statement that summarizes why a consumer should buy a product or use a service.

Business Blueprints™ Value Proposition How do customers define Value Proposition? Copyright: www.com 9 .stankirkwood.

Fast and Cheap Copyright: www.com 10 .stankirkwood.Business Blueprints™ Value Proposition Good.

stankirkwood.com 11 .Business Blueprints™ Value Proposition How did suppliers meet customer expectations? Copyright: www.

Business Blueprints™ Value Proposition Good. Fast and Cheap: Pick Two * * http://www.stankirkwood.sixside.com/fast_good_cheap.com 12 .asp Copyright: www.

stankirkwood.com 13 . pick two • If you want Good and Fast it will not be Cheap • If you want Good and Cheap it will not be Fast • If you want Fast and Cheap it will not be Good Copyright: www.Business Blueprints™ Value Proposition Good. Fast and Cheap.

Fast and Cheap.Business Blueprints™ Value Proposition Good. pick two Imagine if you are a supplier who can make all three come true at the same time? You will have the compelling Value Proposition and you will win in the market place Copyright: www.com 14 .stankirkwood.

Business Blueprints™ Dell Computers Michael Dell – net worth $17.com .stankirkwood. Became most profitable supplier of PCs in world 15 Copyright: www.3 billion Offered computers to customers: • Good – quality on par or better than competitors • Fast – customize PCs delivered in days • Cheap – equal to or lower than competition.

Business Blueprints™ Wal-Mart Wal-Mart – from one store in Arkansas to: • 2.com 16 .055.000 employees • $397 Billion in annual sales Why? • Good – quality on par or better than competitors • Fast – product available on shelves • Cheap – equal to or lower than competition Became largest corporation in world Copyright: www.stankirkwood.

com 17 .stankirkwood. Fast and Cheap Only three of the four components of the Value Proposition There is one more component Copyright: www.Business Blueprints™ Value Proposition Good.

stankirkwood.com 18 .Business Blueprints™ Value Proposition Desirability Copyright: www.

Business Blueprints™ Desirability Desirability in a House: .com 19 .May be open floor plan Copyright: www.stankirkwood.May be number of bathrooms .May be landscaping .May be style .

May be speed .stankirkwood.May be styling of car .May be options .Business Blueprints™ Desirability Desirability in a Car: .May be gas mileage Copyright: www.com 20 .

has few problems • Fast .Business Blueprints™ Desirability If a car is: • Good .available immediately • Cheap .stankirkwood.com 21 .affordable But • It is ugly Will you buy it? Copyright: www.

Business Blueprints™ Desirability Not if you can help it. Your decision will depend on how you view the four components of the Value Proposition.com 22 . Copyright: www.stankirkwood.

Business Blueprints™ Relative Value Quantify the importance of each Value Proposition Component VP Components Car All things equal College graduate Family of five Empty Nester Desirability Price 25 25 10 70 25 25 50 15 Quality Lead Time 25 25 15 5 40 10 25 10 Weight of Value Proposition (VP) Components depends on customer segment Copyright: www.stankirkwood.com 23 .

Business Blueprints™ Value Proposition Attributes Value Proposition Components are made up of VP Attributes which can be further decomposed into VP Elements.com 24 .stankirkwood. Component Desirability Styling Curved bumper Mag Wheels Spoiler Attributes Elements Options Leather Seats GPS Sun Roof Copyright: www.

DQM² = Define.com 25 .stankirkwood.Business Blueprints™ Management by Design The key to the Value Proposition effort: Defining and quantifying the Value Proposition so that you can measure and manage it. Measure and Manage You are creating a critical path for your company Copyright: www. Quantify.

Business Blueprints™ Management by Design Defining and quantifying the Value Proposition creates a critical path for your company – Provides clarity of purpose – Identifies where to focus resources Copyright: www.com 26 .stankirkwood.

Business Blueprints™ Market Performance Focus on what is Important! Market Importance 45 40 35 30 25 20 15 10 5 0 K-12 Universities First Responder Which Market will you go after? 27 Copyright: www.com .stankirkwood.

Business Blueprints™ Customer Performance Focus on what is Important! Customer Rankings . Which customers will you appeal to? Copyright: www.com 28 .Pie Police Fire EMS Customers use your products and services.stankirkwood.

stankirkwood. 29 Copyright: www.Business Blueprints™ Product Performance Focus on what is Important! Products 40 35 30 25 20 15 10 5 0 Std Duty Heavy Duty Turnout Storage Your products and services must have a compelling Value Proposition.com .

stankirkwood.com .Business Blueprints™ Value Proposition Several important ideas to remember: • You should be intentionally designing your products and services based upon the Value Proposition • The market place establishes the base line for Value Proposition • The market place keeps changing which means the relevance of every design keeps changing • All designs become obsolete over time 30 Copyright: www.

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