Value Proposition

AAA

DEFINITION of 'Value Proposition'

A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

INVESTOPEDIA EXPLAINS 'Value Proposition'

Companies use this statement to target customers who will benefit most from using the company's products, and this helps maintain an economic moat. The ideal value proposition is concise and appeals to the customer's strongest decision-making drivers. Companies pay a high price when customers lose sight of the company's value proposition.

VIDEO

Loading the player...
RELATED TERMS
  1. Activities, Interests And Opinions ...

    A person's characteristics used by market researchers to construct ...
  2. American Customer Satisfaction ...

    An index that provides information on how satisfied U.S. consumers ...
  3. Prophet's Reputation Management ...

    An index created by strategic brand and marketing consultancy ...
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective ...
  5. Brand Equity

    The value premium that a company realizes from a product with ...
  6. Economic Moat

    The competitive advantage that one company has over other companies ...
RELATED FAQS
  1. What are the elements of an effective value proposition?

    In the modern world’s ultra-competitive marketplace, a critical factor in determining the success of a company is how good ... Read Full Answer >>
  2. Why is it important for a financial advisor to have a unique value proposition?

    It's important for a financial adviser to have a unique value proposition for the same reason that it's important for any ... Read Full Answer >>
  3. What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages ... Read Full Answer >>
Related Articles
  1. Professionals

    Value Proposition

    A value proposition is a company’s promise to its customers of a unique and relevant benefit. The value proposition is often the heart of a company’s advertising campaigns.
  2. Professionals

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  3. Personal Finance

    The Pros And Cons Of Sports Investing

    Consider these advantages and disadvantages before investing in businesses related to your favorite teams.
  4. Personal Finance

    How Youtube Ad Revenue Works

    Many people make money off of their YouTube videos through ad revenue, but just exactly how does Youtube Ad Revenue work? Quite simply, it turns out.
  5. Personal Finance

    How Instagram Makes Money

    Like many big names in social media, Instagram started as a fun idea without a clear path to profit.
  6. Stock Analysis

    Is SodaStream Ready For A Come Back?

    It's not easy to be a SodaStream investor. The once-fizzy market has gone flat, shedding roughly three-quarters of its value since peaking two summers ago.
  7. Investing

    Multiple Myeloma: A Growing Market For Treatment

    American and European regulators have given Celgene Corporation the OK to begin marketing its top-selling myeloma drug Revlimid as a first-line therapy.
  8. Investing

    Advertising From TV To Internet: An Industry History

    Changes in television consumption habits have forced advertising to target audiences through new means, namely Internet advertising.
  9. Personal Finance

    How Pinterest Makes Money

    Unlike other social platforms, Pinterest actually caters to people who want more stuff.
  10. Investing

    The (High) Cost of Advertising in Times Square

    Advertising on a Times Square billboard costs more per impression than similar forms of advertising, but that doesn't mean it's not worth it.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center