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Creating a Winning Value proposition
1. Presentation to all employees Feb. 2013
How to Create
a Winning Value Proposition
Tony Monda
2. How Do We Win?
Problem Statement
• We are not the largest supplier to most of our customers.
• We are competing against bigger, stronger global competitors.
• We do not have a cost advantage, a technology advantage, or a
quality/reliability advantage in most competitive bids.
• Most of our competitors have a lower cost position due to their
size; scale offers lower material prices and manufacturing
efficiencies.
How do you convince global companies to buy from us?
3. We Win with a Compelling Value Proposition
What is a value proposition?
A company’s value proposition is a statement of the benefits delivered by
the brand that provide value to the customer. An effective value
proposition should lead a brand-customer relationship and drive purchase
decisions….Dr. David Aaker
Monda translation: a value proposition is the primary reason a
customer buys from you.
A value proposition statement communicates:
•Benefits that add customer value
•Why we are different
•Brand –customer relationship
•Gives customers a reason to buy
4. Three Axes of a Value Proposition
Relationship
Low Cost Technology
Must differentiate our offer from the competitors’ offer.
May match a competitor on every value dimension but one (parity).
Must excel in least one element of value (superiority).
There is a difference between our company and our products, both
must be addressed.
Our value proposition must lead in one of the value
disciplines, but also provide parity in the other two.
5. A Value Proposition Must Be Supported by a Company’s
Core Competencies
What are the strengths of our product portfolio?
What are the strengths of our manufacturing model?
What are our technological strengths?
How are our strengths different from our competitors’?
What can we really achieve?
How is our value proposition relevant to what you do and the market
you serve?
Brand Relevance…
What Strengths Resonate With Customers?
6. Value Propositions Must Be Actionable
Can you identify this company from their value proposition excerpt?
SUPERIOR EXPERIENCES - customer will: Answer:
Southwest Airlines
1. Consistently save significant travel time, door-to-door
Actionable Events: Wait <30 min for next flight; always fly direct;
delays on <10% of trips; <30 minutes surface travel; <15
minutes within airports;
In consequence; total savings of 1 to 3 hours per such trip;
allows additional trip and/or more business/personal time
2. Be much more amused during flights
Actionable Events: Often laugh at diversions & jokes of front-line staff;
In consequence; be aggravated/bored less, vs. driving or
other airlines
The point is this value proposition clearly drives organizational alignment
of activities.
What Actionable Events Does Our VP Drive?
7. What is Your Vision Of Our Value Proposition?
Now it is your turn…
Think about what you do and the market that you serve.
How would you answer the following questions…
1. What market do you serve?
2. How would you define our Value Proposition?
3. What aligned actions will it drive? (Organizational alignment –
what will you do differently?)
Editor's Notes
I hope you don’t mind that I brought a few notes…. HelloWhat I would like to accomplish in today’s meeting- review value prop development/ get your suggestions to improve Remy’s VP Ask why people buy apple products iPhone Why? Technology that liberates Harley Davidson – joint the brotherhood, all you need is a harley, doesn’t matter what model Amazon (recently voted the mist trusted brand in America) Why?
Think about the three axis - Give me examples of companies at the end of each axisNow think about were Remy fits – we can’t be all thing s to all people In your segment, where do you think we lead? What about parity? Examples how MAC and Jag solved the parity issue (companies without parity become irrelevent)Category point of parity examples: McDonald's and the Starbucks challenge - cutting into their breakfast business - Answer. McCafe not better, just parity enough to save the save the breakfast segment business Jaguar executives saw their brand being irrelevant to those that wanted four-wheel drive. When that group hit 50 percent of purchases in their top geographic markets, Jaguar introduced an all-wheel-drive model. These vehicles were intended not to be superior to others but rather good enough to eliminate, for most buyers, the reason to exclude Jaguar from consideration.
Core competencies - things we are really good at.(read the list) The most important point is that our value proposition must be relevant to our customers - so relevant that they are willing to vote with their wallets and pay for it!
First of all - On which of the three axes does SW differentiate? Not complete VP ….SW complete VP – parity is safety Differentiation - Cost (save 30% v full fare carriers / save time too) In the SW example you begin to see how a powerful value proposition drives organizational alignment and focuses each and every employees daily activities Ask about what actions SW VP drives