Unit 5: Product Propositions

Lesson 2
Value Proposition

Entrepreneurship
Senior High School Applied - Academic
What directs all future
decisions, innovations,
and target customers in a
business?

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 2
 ● Recognize and understand the
Learning market.
● Describe the value proposition
Objectives that differentiates one’s
At the end of the
product or service from
lesson, you should be existing products or services.
able to do the
following:

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 33
1. What were the offerings or benefits of your
school presented to you when you
enrolled?
2. What benefits did you get from school
now?
3. Why is your school better than any
alternatives? Write your justifications.
ENGAG EXPLOR EVALUAT
EXPLAIN EXTEND 4
 Value Proposition

Value proposition is a
business or
marketing statement
indicating the worth
that the business
offers to customers.
ENGAG EXPLOR EVALUAT
EXPLAIN EXTEND 5
 Example of Value Propositions
Business Product Value Proposition

Walmart Products offered virtually Save money, Live better

Spotify Online music streaming Soundtrack your life

Vimeo Online video streaming Makes life worth watching

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 6
What is a value proposition builder
model?

7
 Value Proposition Builder Model

The value proposition builder model is a six-

step interactive process in building value or
worth to the customer experience.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 8
 Value Proposition Builder Model

Steps

4. Benefits

5. Alternative and differentiation

6. Proof
ENGAG EXPLOR EVALUAT
EXPLAIN EXTEND 9
 Value Proposition Builder Model

Steps

1. Market

2. Value experience

3. Offerings
ENGAG EXPLOR EVALUAT
EXPLAIN EXTEND 10
Tip

In writing the value proposition, think

about two main things:

1. Experience of the customers, and

2. Capabilities of the products or
services.

11
 The Value Life Cycle

The value proposition must be studied

throughout the entire life cycle of value
perceived by customers.

An entrepreneur must create an attribute that

captures the five stages of the value life cycle.
ENGAG EXPLOR EVALUAT
EXPLAIN EXTEND 12
 Stages of Value Life Cycle

1. Value Creation
2. Value Appropriation
3. Value Consumption
4. Value Renewal
5. Value Transfer

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 13
 Example: Value Life Cycle

Situationer
An individual who sells pizza in a school canteen
may go through stages in the value life cycle.
Below are the following examples.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 14
14
 Example: Value Life Cycle
1. Value Creation
The business owner will create a product that his
customers will surely like. The key partners are
the business owner, including all his sales staff.
Key activities include the creation of the actual
product, such as cooking.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 15
15
 Example: Value Life Cycle
1. Value Creation
The key resources will be the materials and
ingredients needed to create the finished
product. The entrepreneur also chooses a value
proposition that will fit the business.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 16
16
 Example: Value Life Cycle
2. Value Appropriation
The business owner notices that most of the
students in the school do not like the flavor of
pizza he offers. He decided to innovate his
product. Instead of selling only one flavor, he
adds a variety of flavors to choose from. Most of
the flavors he chose to add are unique and tasty.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 17
17
 Example: Value Life Cycle
3. Value Consumption
The customers start to patronize the product.
They now see and feel the value and benefit they
get in the product.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 18
18
 Example: Value Life Cycle
4. Value Renewal
The customer now doesn’t like the product
because of their changing preferences. The
entrepreneur will improve the product by adding
features like additional toppings for the pizza.
Through this, customer value also increases.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 19
19
 Example: Value Life Cycle
5. Value Transfer
Customer transfers to another store or product
because the received value did not match with
the value proposition. When value did not meet
the expectation, there is a possibility that
customers may transfer.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 20
20
What are the advantages of a value
proposition to a business?

21
 Value Proposition Advantages

1. Gives direction.
2. Creates focus.
3. Breeds confidence.
4. Customer understanding and engagement.
5. Focus on clarity of value.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 22
 Example: Value Life Cycle
3. Value Consumption
The customers start to patronize the product.
They now see and feel the value and benefit they
get in the product.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 24
24
 Example: Value Life Cycle
4. Value Renewal
The customer now doesn’t like the product
because of their changing preferences. The
entrepreneur will improve the product by adding
features like additional toppings for the pizza.
Through this, customer value also increases.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 25
25
 Example: Value Life Cycle
5. Value Transfer
Customer transfers to another store or product
because the received value did not match with
the value proposition. When value did not meet
the expectation, there is a possibility that
customers may transfer.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 26
26
What are the advantages of a value
proposition to a business?

27
 Value Proposition Advantages

1. Gives direction.
2. Creates focus.
3. Breeds confidence.
4. Customer understanding and engagement.
5. Focus on clarity of value.

ENGAG EXPLOR EVALUAT

EXPLAIN EXTEND 28
 Wrap Up

A Value Proposition is a business or marketing

statement indicating the worth that the business
offers to customers.

The value proposition gives direction, creates

focus, breeds confidence, improves customer
understanding and engagement, and focuses
on clarity of business value.

29
 Wrap Up

The value proposition builder model consists

of six steps, namely: market, value experience,
offerings, benefits, alternatives and
differentiation, and proof.

30
Wrap Up

31