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Value Proposition

Part 5. Product Innovation and Management

  1. Shikhar Sarin

Published Online: 15 DEC 2010

DOI: 10.1002/9781444316568.wiem05057

Wiley International Encyclopedia of Marketing

Wiley International Encyclopedia of Marketing

How to Cite

Sarin, S. 2010. Value Proposition. Wiley International Encyclopedia of Marketing. 5.

Author Information

  1. Boise State University, Boise, ID, USA

Publication History

  1. Published Online: 15 DEC 2010

Abstract

Value proposition is the sum total of all the benefits a seller's offering delivers to a target customer in a purchase. Development of a compelling value proposition starts with the identification of the key value drivers for the customer, and/or the key value elements of a seller's offering. Three types of value elements are seen: (i) points of parity (i.e., elements that are the same as the next best alternative); (ii) points of differentiation (i.e., elements that are superior or inferior to the next best alternative); and (iii) points of contention (i.e., elements on which the buyer and seller disagree as to the value). Using these value elements, sellers can construct three types of value propositions: (i) all benefits (i.e., a listing of all the benefits sellers believe they deliver to the target customer); (ii) favorable points of differentiation (i.e., differentiating the seller's offering from the next best alternative); and (iii) resonating focus (i.e., making the seller's offering superior on the few key elements that matter the most to the target customer).

Keywords:

  • value to the customer;
  • value proposition;
  • customer value proposition;
  • competitive parity;
  • differentiation