A good way to think about the firm’s value proposition is consider what is different and beneficial about the firm’s (or brand’s) offering/s in the marketplace.
Over time, firms/brands will develop and enhance multiple offerings for their target markets. If consumers perceive that the firm/brand offers good value then they are more likely to become and remain customers.
As a simple definition, the brand’s value proposition is:
The overall package of perceived value (that is, key benefits less costs) offered by the brand.
Value proposition example for McDonald’s
Let’s use McDonald’s as an example to describe a value proposition. In particular we are looking at how McDonald’s is differentiated from its competitors – what overall package of benefits and unique offerings to they provide their customers?
McDonald’s value proposition would include:
- convenient locations
- comfortable seating and in-store facilities
- fast and efficient service
- consistent quality menu items
- distinct products, such as the Big Mac
- good value offering and pricing
- a broad range of food choices – suitable for a variety of ages
You should note, that this overall value proposition for McDonald’s would appeal to a number of different target markets.
For example, a broad range of food choices would appeal to a family. Comfortable seating and in-store facilities would appeal to somebody who is looking to have a bite to eat and relax or perhaps socialize.
McDonald’s, in their overall value proposition, have a number of distinctive benefits over their key competitors – such as, locations, facilities, speed of service and distinctive products.
The essence of the value proposition is to give consumers a reason to become a customer of your brand – because the offering has aspects of value that are attractive to a particular consumer within a target market – as is the case with McDonald’s value proposition.
How to identify a value proposition