A value proposition is a short statement that communicates why buyers should choose some products or services. It is more than just a product or service description — it is the specific solution that a business provides and the promise of value that a customer can expect to receive.
Generally, the value proposition is addressed to the company’s target customers or target market segments. The value proposition takes the form of a short, clear, and concise statement of the tangible and intangible benefits that will be delivered to customers. The perfect value proposition must distinctly transmit the values to potential customers without the need for further explanation. Each value proposition must be unique, as it is a method to communicate the differentiation points of a company to the target customers.
Importance of having a resonant proposition
The development of a value proposition is a vital part of a company’s business strategy. Since the value proposition provides a company with a method to influence the buying decisions of its customers, it is at the core of the company’s marketing activities. A resonant value proposition could be the difference between losing a sale — and closing it.
Value proposition creates significance for a customer segment through a distinct mix of elements catering to that segment’s needs. The value may be quantitative (e.g. price, speed of service) or qualitative (e.g. design, customer experience). Some value propositions may be innovative and represent a new or disruptive offer. Others may be similar to existing market offers, but with added features and attributes.
Adapting the value proposition for the new market
While pricing is always a factor, many customers are happy to pay more for a product if it is the best solution to the problem they are facing. Customers are often looking for things outside of cost, such as:
- Quality of the product,
- Speed of results,
- Efficiency in solving their problem,
- Brand’s reputation,
- Product guarantees,
- Sizes and packaging ,
- And much more.
Different customers within one market are looking for a different set of values. When a company is entering a new market, it must adapt the value proposition to the specific needs of its new target customers. Simply assuming that foreign customers in the new market will respond positively to an existing value proposition can lead to a costly failure.
Marketing a standardized product with the same positioning and communications strategy around the globe has considerable attraction because of its cost-effectiveness and simplicity. But, adapting the value proposition according to the local market requirements is often necessary for achieving the expected results.
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Using qualitative research to understand and determine the customer needs, combined with quantitative research to validate, size, and add metrics to these findings, we can craft a resonant value proposition that acts as the cornerstone of the marketing strategy in the Serbian market.