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Understanding Value Propositions in Business

The document discusses the concept of value propositions, which define the worth and benefits a company offers to its customers. It outlines five key values that can be used to create a compelling value proposition, emphasizing the importance of a dominant and differentiating value. Additionally, it introduces the Unique Selling Proposition (USP) as a concise summary of a firm's value proposition, providing examples from companies like Google, Amazon, and Starbucks.

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26 views9 pages

Understanding Value Propositions in Business

The document discusses the concept of value propositions, which define the worth and benefits a company offers to its customers. It outlines five key values that can be used to create a compelling value proposition, emphasizing the importance of a dominant and differentiating value. Additionally, it introduces the Unique Selling Proposition (USP) as a concise summary of a firm's value proposition, providing examples from companies like Google, Amazon, and Starbucks.

Uploaded by

oyabak064
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

VALUE PROPOSITION

BES04 - TECHNOPRENEURSHIP
▪ Value is the worth, importance, or usefulness
to the customer.
▪ In business terms, value is the worth in
monetary terms of the social and economic
benefits a customer receives from paying for
a product or service.
▪ The value proposition defines the company
to the customer.
▪ The value proposition states who the
customer is and describes the values offered
to this customer.
TABLE 6.1
FIVE VALUES OFFERED TO A CUSTOMER
Most value propositions can
be described using the five key
values.

▪ Crawford and Matthews have shown that one value is selected to dominate
the value proposition offered to the customer. A second value differentiates
the offering, and the remaining three values must meet the industry norm
[Crawford and Matthews, 2001].
▪ Consider a performance rating on a 1-to-5 scale where 5 is world-class, 1 is
unacceptable, and 3 is industry par.
▪ Crawford states that a venture should plan a good product offering to have a
value score of 5, 4, 3, 3, 3 for its five value proposition attributes in the
following order: dominant, differentiating, norm, norm, norm.
▪ Dominant value: Price ▪ Dominant value: Product

▪ Differentiating value: Product in terms of ▪ Differentiating value: Price


selection and quality
Google’s Value Proposition
It offers product as its primary value with fast, relevant results for the
most ill-described inquiry. Its secondary value is access, which is
embodied in the easy online connection right to the search page
without annoying pages or advertisements obscuring the search box.
[Link]
An easily accessible Internet site that is always convenient and provides a
wide selection of products at a fair price to the busy, computer-literate
customer.
Starbucks
A friendly, comfortable, well-located café offering a wide range of fresh,
customized quality coffees, teas, and other beverages for the person who
enjoys a good experience and a good beverage.
UNIQUE SELLING PROPOSITION
▪ USP is a short version of a firm’s
value proposition and is often Examples:
used as a slogan or summary Hewlett-Packard
phrase to explain the key benefits Excellent technical products with reliable
service at a fair price.
of the firm’s offering versus that
FedEx
of a key competitor.
Positively, absolutely overnight.
▪ USPs are useful for succinctly
describing a new venture to
would-be investors, customers, or
team members.
THANK YOU!

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