Course: SLF 130 Marketing Practices for the Small Business

Unit 1 Reading

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Marketing Concepts_page 2

What is a VALUE PROPOSITION?  The value proposition is the offering of VALUE to the customer.   A working mother needs convenience, a procrastinator needs a tax service willing to do work on April 14, or a restaurant needs a delivery service that can provide hot food to its customers. These are all VALUE PROPOSITIONS.
To analyze a small business value proposition, it can be helpful to “separate” FEATURES and BENEFITS to be sure that customer-orientation is at the heart of the business offering.

Features are characteristics or functional aspects of products or services.  For example, a pre-packaged “box of food” contains 16 ounces and can be microwaved.

The benefits are the “what can this do for me” aspect that interests a consumer. This fairly expensive “box of food” can be heated in three minutes and satisfy a hungry person!  This represents a good value proposition. Value does not refer to just an economical price, it refers to an offering of value (the value proposition).

Here’s another feature – benefit example.  An expensive shirt is made of a particular fabric
that is wrinkle-free.

The benefits are many: no iron required, time is saved, an unpleasant task is avoided,
and the wearer of the shirt presents himself or herself in a professional and attractive manner!

When benefits are apparent to consumers, a higher price is not a barrier.
Organizations can use value propositions to position value to a range of potential constituents/
users such as:

- Customers: to explain why a customer should buy from a supplier.
- Partners: to persuade them to forge a strategic alliance or  joint venture.
- Employees: to "sell" the company when recruiting new people, or for retaining and motivating existing employees.
- Suppliers: to explain why a supplier should want to be a supplier to an organization or customer

Stop and review:

A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services.

A feature is a tangible or defined characteristic of a product. A benefit is the desired end result of the use of the product or service.  Features are created by engineers and designers, but customers need to see and understand the benefits. Benefits SELL products or services.