Creating the Value Proposition

Your value proposition is the core of your competitive advantage. It clearly articulates why someone would want to buy from your company instead of a competitor. A value proposition is a concise and compelling description of the core benefit people get from doing business with you. In the case of a special brand, it’s the unique value you have to offer that people won’t get from elsewhere. In the case of products or services, it’s the problem they solve or the positive impact they have on people lives. The value proposition must involve elements like segmentation, targeting, differentiation and positioning as shown in Fig. 9.1. The value proposition includes the selection of customers to serve and the decision on value proposition. The segmentation is the division of the total market into smaller segments or pieces, e.g. demographic, regional or psychological segmentation. Targeting is focusing the right customer groups, which are selected as the ideal group to purchase a product or a service. Differentiation is the process of making the product or service unique, so that the customers perceive specific and superior value in the purchase of the product or service. Positioning is the placement of market offerings in specific markets.