Marketing experts have long been using the concept of creating a 
value proposition for their services or products. If you do not 
know what your value proposition is or even what a value 
proposition is then you need to spend some time developing one. 
A value proposition has many names. Some refer to a value 
proposition as a unique selling point or an inferred positioning 
statement. No matter what name you give it, a value proposition 
is critical for a business to successfully sell their product or 
service.

A value proposition has three primary elements that you should 
focus on. The first of these elements is the target market 
segment. Who are you trying to sell your product to? Who do you 
believe that your customer base is? These are easy questions to 
answer for some while difficult for others. If you are selling 
men’s hair coloring to remove gray hair then it is easy to 
identify your target market. You are looking for men over 40 
years old primarily. If you are selling make-up then you are 
focusing on women only. However some products make it more 
difficult to define the target market segment. If for example, 
you are selling automobiles then you want to appeal to a vast 
array of people, men, women, various age groups, etc. You need to 
spend time thinking about which target market segment that you 
want to buy your product or service and whom you think will 
actually purchase it. If you are selling high dollar furniture, 
you do not want to market to a lower socioeconomic customer base. 
If you are selling low priced automobiles, you will want to focus 
on that market segment instead of the more affluent market. 

The second element to a successful value proposition is the 
reasons why a customer would buy your product or service. This is 
a point of differentiation amongst your competitors. Put simply, 
why would a potential customer choose your product or service 
over a competitor? Depending on your marketing strategy there 
are a variety of reasons that a customer may choose you 
over a competitor. Some of these reasons may include, price 
differentiation, quality, brand name, customer service, etc. As a 
business owner you need to decide which of these factors you want 
to focus on the most. Do you want to set your product apart from 
others because of the price? Do you want to draw a customer base 
that is focused on quality? Of course in a perfect world we would 
offer the customer the best of all these categories, but that is 
very hard to achieve. Appealing to both the cost conscience and 
the person looking for name brands is quite challenging and may 
very well be impractical. 

The third element of a successful value proposition is comparison 
with other products. This is similar to defining why customers 
would choose your product or service over others. This is a frame 
of reference for you and for potential customers. If you sell Kia 
automobiles your frame of reference will likely be on the value 
of the vehicle. Conversely, if you sell Mercedes automobiles your 
frame of reference will be on the prestige associated with it and 
the quality of the vehicle. Volvo is often associated with being 
the leader in safety in the automobile industry so their frame of 
reference is different from both Kia and Mercedes. Understand 
that all of these automakers are extremely successful in their 
individual target markets. You too must choose what approach you 
want to take with your product or service line. Do you want to 
position your product as a value, a prestige product, a higher 
quality, etc.? Once you have decided what your frame of reference 
is you can begin your marketing campaign. 

It is critical that you choose a marketing position that you 
can defend. Much like Kia is able to defend their claim to be 
inexpensive, Volvo has numbers to back up their safety claims. 
Positioning involves making a clear choice of the target 
segment to be served, the points of difference compared to the 
competitors and the frame of reference for the customers. A 
successful business offers more than one single benefit and 
appeals to more than one segment of the market while staying 
focused on the key benefit of that product or service while 
identifying to whom it has the greatest appeal. Positioning 
allows the business to choose with whom it competes. 

Now look at your product or service and start thinking carefully 
about what you want your value proposition to be. It is quite 
difficult to change that value proposition once it has been 
implemented. For example, consider if Kia tried to compete with 
the customer base that Mercedes has. It would be quite difficult 
to implement, although not impossible. So get started today in 
developing that value proposition before throwing away money on 
misdirected advertisements.  

Trey Pennewell ghost writes for http://thePhantomWriters.com . 
Before joining the Phantom Writers, he had written keyword 
optimized content for hundreds of websites, to pay his way 
through college. He continues to write because he enjoys the 
process of research and writing content that others will find 
valuable. He has written on topics ranging from internet 
technology to online business and marketing, and he has even 
written on topics related to his degree fields of sociology 
and medical business administration.