4 Checks for your value proposition - will you succeed?

The books say that you need to define your value proposition in order to brief the ad agency and the creative people and salespersons so that they can communicate with your customers. I say that value proposition is a story you need to first tell yourself internally before you start - rather than telling it when the time comes to communicate and sell the product. You need to answer the following questions before you start the business / product ...

What is your insight ? 

what makes you enter the market in the first place? I hope its is not because you have the money - or because of everybody is doing it - or because loans are available for the planned activity ! Ideally your insight should be based on any or all of the following four things

• MARKET : unfulfilled needs or partially fulfilled needs of customers
• COSTS : ways for reducing costs without diluting the benefits for existing players
• BUILD ASSETS EFFICIENTLY : efficient ways to acquire assets (financial - structural - relational - human) which will grow well with the passage of time.
• YOUR EXISTING COMPETENCIES : can be used in a better fashion than that by your competitors.       

Market Knowledge 

Without a clear visibility of the following, you will not know what "marketing mix" you must offer to them. This knowledge enables you to decide what value must be created, for whom and how it needs to be taken to them so that they can buy it. In order to take these decisions you need to acquire market knowledge about the following 7 things : 

1. TA PROFILE : Target Customers - who are they? how many? where are they ?
2. INWARD ACCESS : can they access you ? 
3. HOW DO THEY COME TO MARKET : current buying stages / behavior ?
4. CURRENT CHOICES MADE BY TA : what category, channels selling now?
5. TA SEARCH : to what extent are they searching for you? how ?
6. TA READINESS : how far away from budget, organization, intent ?
7. YOUR ACCESS  : how will your people recognize and access them?

What value will you offer and how is it better  

WHAT VALUE WILL YOU OFFER : You cannot craft your value proposition without clearly understanding and deciding "what matters to the customer" and how much of it will you give vis-a-vis the current choices made by the TA. It will be good to remember that what matters to the customer is not the product alone but its availability, terms and condition, price, delivery, installation, training, repair etc. There are many different models for thinking this through. I suggest you use two models : 8Ps and PFSR

1. 8Ps :Product, Packaging, Price, Place, Promotion, People, Processes, Physical Evidence.
2. PFSR model : value is driven by Product, Facility, Service and Reputation

HOW IS IT BETTER : It should be ideally better than the "current choices made by TA" and also be focused on the targeted needs of the customers. Example : your car is "better than SX4 in fuel efficiency" and "meets the need of boot space for a family of 5 going for a week long trip"

How feasible is it to create and sell such an offer

1. Can you adjust the price to handle the costs you have planned?
2. Can you adjust the costs to handle the pricing you have planned ?
3. Do you have the competence to create what you have planned ?
4. Do you have the resources for what you have planned?