Developing and implementing value proposition

Lecture 11

Marketing Management (MBA)

Three Kinds of Value Propositions

• All benefits

• Favorable points of difference

• Resonating focus (Anderson et al, 2006)

Three Kinds of Value Propositions (2)

The Building Blocks of a Successful Customer Value Proposition

• the essential question is, "How do these value elements compare with those of the next best alternative?”

• There are three ways to develop successful value proposition – Points of parity are elements with essentially the same

performance or functionality as those of the next best alternative.

– Points of difference are elements that make the supplier’s offering either superior or inferior to the next best alternative.

– Points of contention are elements about which the supplier and its customers disagree regarding how their performance or functionality compares with those of the next best alternative.

Examples of value proposition

Value proposition builder (Barnes et al, 2009)

Value proposition template and value proposition statement

Ten-point value proposition template

Corresponding areas in Figure

Functional Responsibility

Who is the intended customer? Market VP team with Board sponsor

What will the customer’s experience be of the offering and the company, and what price will they pay?

Value experience VP team with Board sponsor

What offerings will we create to deliver the intended experience to the intended customer? What purchase or usage of offerings do we want from the intended customer?

Offerings VP team with Board sponsor

What benefits will the customer derive from the experience and at what cost?

benefits VP team with Board sponsor

What competing alternatives do the customers have? How are we different?

Alternatives and differences

VP team with Board sponsor

How will we substantiate our ability to deliver the resulting customer experience measurably and specifically?

Proofs VP team with Board sponsor

Over what time frame will the proposition be delivered to the customer?

VP team with Board sponsor

How will the value proposition be communicated internally and externally?

Marketing & sales

How will the value proposition be operationalized throughout the business?

Operations & HR

How will we measure and monitor the effectiveness of the proposition on our business?

Balanced scorecard and finance

An example: Values proposition statement

• You are important to us and, through our partner-led approach, we work with you to ensure planning and tax compliance is fully integrated and operates effectively within the context of your business, enabling you to minimize risk, while delivering clarity and effectiveness in your tax philosophy.

• Our account management approach ensures one single partner has a comprehensive overview of the tax service delivery. This provides you with a single point of contact, allowing you to achieve rapid decision making, solve problems and maximize efficiency.

• Our prices remain competitively aligned with the value we deliver and are 10% less than the top global firms

Illustration of using the template

Illustration of using the template (2)

Illustration of using the template (3)

Illustration of using the template (4)

Illustration of using the template (5)

An example: Intel

An example: Intel -2

An example: Intel -3

Class exercise

Ten-point value proposition

template

Who is the intended customer?

What will the customer’s experience be of the offering and the company, and what price will they pay?

What offerings will we create to deliver the intended experience to the intended customer? What purchase or usage of offerings do we want from the intended customer?

What benefits will the customer derive from the experience and at what cost?

What competing alternatives do the customers have? How are we different?

How will we substantiate our ability to deliver the resulting customer experience measurably and specifically?

Over what time frame will the proposition be delivered to the customer?

How will the value proposition be communicated internally and externally?

How will the value proposition be operationalized throughout the business?

How will we measure and monitor the effectiveness of the proposition on our business?

Implementation