Value Proposition

Design

Module 5
 Topics covered

• What is Value Proposition-importance of Value Proposition? Customer

Profile (Gains and Pains)- understanding the Value Map- Developing the
Value Map- Industry Analysis- Blue Ocean Strategy (Industry analysis).
• According to Wikipedia, “a value proposition is a promise of value to be delivered,
communicated, and acknowledged. It is also a belief from the customer about how
value (benefit) will be delivered, experienced and acquired.”
• A value proposition is a product, service, or experience that creates desired
gains or relieves existing pains.
• To design a compelling value proposition, you must understand the desired gains
and existing pains of the people you aim to serve. Through this process you may
also uncover unexpected gains.
• Osterwalder introduced this concept at depth in his book Value
Proposition Design.
• The Value Proposition Canvas helps teams deepen their understanding of
target customers.
• Solutions to the desired gains, existing pains, and Jobs-To-Be-Done of
customers are also designed and tested.
 What is Value Proposition?
• A value proposition is a clear, concise statement that articulates the unique
benefits or value that a product, service, or solution provides to its
customers.
• It is essentially the answer to the question: "Why should a customer choose
your product or service over others in the market?"
• A strong value proposition communicates the distinct advantages and
solutions that set a business apart, addressing the needs and preferences of
its target audience.
• Drive Customer Acquisition and Retention: A strong value proposition can attract new
customers by clearly communicating the benefits of the product or service. Additionally, it
contributes to customer retention by consistently delivering the promised value and
maintaining customer satisfaction.
• Guide Product Development: The value proposition informs product or service
development by focusing on what aspects are most valuable to customers. It ensures that
efforts are aligned with customer needs and preferences, enhancing the likelihood of success
in the market.
• Build Brand Loyalty: When customers perceive unique value in a product or service, they
are more likely to become loyal customers. A compelling value proposition establishes a
strong foundation for building and maintaining brand loyalty over time.
• Facilitate Decision-Making: In a marketplace with numerous options, customers
appreciate clarity and simplicity in decision-making. A well-defined value proposition aids
customers in quickly understanding why a particular product or service is the right choice
for them.
• Support Pricing Strategies: A value proposition helps justify the pricing of a product or
service by highlighting the benefits and value it provides. Customers are more willing to pay
a premium if they perceive that the offering meets their needs effectively.
• A value proposition is a critical component of a business strategy, providing a concise and
compelling reason for customers to choose a particular product or service. It aligns
marketing efforts, guides product development, and enhances customer satisfaction and
loyalty.
 Importance of a value proposition lies in its
ability to:
• Differentiate the Offering: In competitive markets, customers are presented with various
choices. A compelling value proposition helps a business stand out by highlighting what
makes its product or service unique and superior to alternatives.
• Address Customer Needs: Understanding and addressing customer needs and pain points
is crucial. A well-crafted value proposition ensures that customers immediately see how the
offering meets their requirements, making it more likely for them to engage with the product
or service.
• Enhance Marketing Effectiveness: A clear and compelling value proposition serves as the
foundation for marketing and promotional activities. It provides a consistent and concise
message that can be communicated across various channels, resonating with the target
audience.
Video…BMC
Video… VPC
Value Proposition Canvas
 Right side of canvas: Customer profile

• Jobs to be Done (JTBD): This refers to the functional, social, and emotional tasks
or problems that customers are trying to accomplish. It goes beyond just product
features and focuses on the underlying motivations and needs of customers.
Identifying the key jobs your customers are trying to get done helps in tailoring your
products or services to fulfill those specific needs.
• Gains: Gains represent the positive outcomes, benefits, or aspirations that
customers seek. These could be things like saving time, reducing costs, improving
efficiency, or achieving personal satisfaction. Understanding the gains your
customers are looking for helps you emphasize and enhance the aspects of your
product or service that provide value.
• Pains: Pains refer to the negative aspects, challenges, or frustrations that
customers experience in trying to get their jobs done. Identifying these pain
points helps businesses find opportunities to alleviate customer discomfort.
Addressing pains effectively can be a key differentiator in the market.
 Left side of the canvas: Value map

• Products & Services: This section outlines the specific features, products, or services that
your business offers to address the identified Jobs to be Done. It's crucial to align these
offerings with the actual needs and desires of your target customers.
• Gain Creators: Gain Creators describe how your products or services create value for
customers by delivering the gains they are seeking. This could involve unique features,
innovative solutions, or any aspect of your offering that goes beyond just meeting basic
needs.
• Pain Relievers: Pain Relievers explain how your products or services alleviate the identified
pains of your customers. This could involve simplifying processes, reducing costs, or
resolving other challenges that customers face in trying to fulfill their jobs.
• The Value Proposition Canvas is a visual tool that facilitates discussions and
collaborations within a team. By filling out this canvas, businesses can gain a
holistic understanding of their customers' needs and how well their current
offerings meet those needs.
• It encourages a customer-centric approach to product development,
marketing, and overall business strategy. Regularly revisiting and updating the
canvas ensures that businesses stay aligned with evolving customer
preferences and market dynamics.
 Value Proposition Canvas Example: Task
Management App
I) Customer Profile:
• Jobs to be Done (JTBD):
• Organize daily tasks efficiently.
• Prioritize and schedule activities.
• Receive timely reminders and notifications.
• Gains:
• Time savings through increased productivity.
• Reduced stress and anxiety by staying on top of tasks.
• Improved work-life balance.
• Pains:
Forgetting important tasks and deadlines.
• Feeling overwhelmed by a disorganized schedule.
• Missing out on opportunities due to poor task management.
II) Value Map:
• Products & Services:
• User-friendly mobile app with task management features.
• Calendar integration for easy scheduling.
• Push notifications for reminders.
• Gain Creators:
• Smart prioritization algorithm for efficient task organization.
• Analytics to show productivity trends and accomplishments.
• Gamification elements for a rewarding user experience.
• Pain Relievers:
• Automated reminders to prevent missing tasks.
• Seamless syncing with calendar apps to avoid scheduling conflicts.
• In-app tutorials and customer support for a smooth user experience.
• In this example, the company has identified the specific needs of its target
customers (Jobs to be Done, Gains, and Pains) and has aligned its offerings
(Products & Services, Gain Creators, and Pain Relievers) to address those
needs effectively.
• This structured approach helps in creating a clear and compelling value
proposition for the task management app.
 Value Proposition Canvas by Strategyzer.com
explained through the Uber Example🚘

• https://www.youtube.com/watch?v=kiWkRiynPAo
 WHAT IS BLUE OCEAN STRATEGY?

• Blue ocean strategy is the simultaneous pursuit of differentiation and low

cost to open up a new market space and create new demand.
• It is about creating and capturing uncontested market space, thereby making
the competition irrelevant
• In their classic book, Blue Ocean Strategy, Chan Kim & Renée Mauborgne
coined the terms ’red ocean’ and ‘blue ocean’ to describe the market universe.
 Red oceans
• Red oceans are all the industries in existence today – the known market
space. In red oceans, industry boundaries are defined and accepted, and the
competitive rules of the game are known.
• Here, companies try to outperform their rivals to grab a greater share of
existing demand.
• As the market space gets crowded, profits and growth are reduced. Products
become commodities, leading to cut throat or ‘bloody’ competition.
• Hence the term red oceans.
 Characteristics of Blue Ocean Strategy

• Innovation: Creating and capturing new market space through innovation,

whether it be in product design, technology, or business model.
• Value Innovation: Simultaneously pursuing differentiation and low cost to
create a leap in value for both customers and the company.
• Focus on the Big Picture: Shifting focus from beating the competition to
making the competition irrelevant by creating a unique market space.
• Four Actions Framework:
• Eliminate: Identify factors that the industry has long competed on but are no
longer relevant. Eliminate them.
• Reduce: Minimize the emphasis on certain aspects of the product or service to
save costs.
• Raise: Enhance certain factors that the industry has never put much emphasis on.
• Create: Introduce new features or elements that the industry has never offered
before
• Implementing a Blue Ocean Strategy requires a deep understanding of
customer needs, market dynamics, and the courage to challenge industry
norms.
• The goal is to create a new market space where competition is minimized,
and the focus is on innovation and value creation.