How to write a value proposition

1. Brian Keith Seitz
Intellectual Arbitrage Group
Managing Director

2. Overview
Throughout this tutorial
Process Steps you will see one of the
following Icons in the
Methods upper right hand corner.
Tools
These Icons are a key to
Exercises the type of information
contained on the page.
References
Tips & Hints
Review

3. What is a Value Proposition
Statement of business strategy: a statement of the way a business
proposes to use its resources to deliver superior value to its customers
What is the Benefit of a Value Proposition
A Value Proposition provides an anchor point to the market from which all of the
business design and marketing actions are aligned.
Defining and using a Value Proposition helps to ensure that the Business’s
efforts match the market’s wants and needs.

4. Benefit of a Value Proposition
The general market positioning statement is as follows :
For (which )target customers who need (which) products that deliver (which
)benefits, our products have (these) as primary differentiation, unlikely (which )
primary competitive alternatives by competitors
For (target customers) :
Who (needs) :
The (product name) :
Is a (category) :
That provides (key benefit) :
Unlike (primary competitive
alternative) :
Our product (primary
differentiation) :

5. 1.Identify target market/customer; enter into worksheet
2.Define offering name; enter into worksheet
3.Define offering category; enter into worksheet
4.Identify/define key benefit and differentiation from market, customer, offering,
and competitive analysis.
5.Edit basic value proposition (template) into final form of value statement
Segment Name 1
Target Customer 1
Target customers’ needs 1
Model 2 Final Value
Proposition 5
Statement
Offering Category 3
Benefits derived from offering 4
Competitor’s alternative offering 4
Differentiation 4
Value Proposition 5

7. Packaging
Visual evaluation /
Availability Bundling
Performance
Customers complete buying
Customer $APPEALS What functionality &
experience - including the channels
performance characteristics
through which they buy
Packaging are wanted?
wt: .094
Availability
Performance Ease of Use
wt: .031
wt: .252
What constitutes ease of
$ Price use, installation,
$Price Ease of Use administration, etc. ?
How much do customers expect wt: .172 wt: .079
to pay for the value they seek?
Social acceptance Assurances
wt: .289
wt: .053
Assurances
Life Cycle Costs
wt: .030 Provided by the whole
Social product/ service
acceptance
What "image" will facilitate
a purchase decision and Life Cycle Costs
how do customers acquire What lifecycle cost considerations
this information? influence the purchase decision?

8. Target Customer Affluent, North American, Home Owners with 4 or
more family members
Storage of perishable food items, convenient
Target customers’ needs
access to commonly used items
Model Samsung RS2623SL 26" cu. ft. Side by Side Refrigerator
Offering Category Household Appliances
Benefits derived from offering
Storage of perishable food items, convenient
access to commonly used items
Competitor’s alternative offering Sub-Zero Model 661/P
Modern Styling
Provides more storage of perishable food items (26cu ft vs 21.3 cu ft)
Differentiation More convenient access to commonly used items through large
through door access and better shelf organization
 More cost effective to operate through advance temperature sensing
Value Proposition More convenient storage for large families for less

9. [ Segment Value Proposition Worksheet ]
Segment Name Affluent North American Appliance Market
The Samsung RS2623SL provides a stylish
Final Value alternative to the Sub-Zero 661/P stainless
Proposition steel box, while providing more and more
Statement convenient storage at less overall cost.

10.  McDonald, Malcom, Marketing Plans How to
prepare them, how to use them, ISBN 0-7506-
5625-5
 Kotler, Philip, Marketing Management, ISBN
0-13-012217-3
 Hiam, Alexander, The Vest-Pocket CEO, ISBN
0-13-948209-1
 Marks, Pete, Customer$APPEALS --Design
Insight Corp. San Jose Ca.