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.

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 Articles
  1. Professionals

    Advertising, Crocodiles And Moats

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

    The Pros And Cons Of Sports Investing

    Consider these advantages and disadvantages before investing in businesses related to your favorite teams.
  3. Investing

    What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages over its competitors in order to protect its long-term profits ...
  4. Fundamental Analysis

    Google Ads Vs. Facebook Ads

    Universal access to the internet through smartphones, tablets and computers has driven the success of numerous companies. Most notably, Google and Facebook have witnessed staggering growth as ...
  5. Entrepreneurship

    How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading the word about the firm.
  6. Entrepreneurship

    How do companies like ClickBank help websites make money?

    Find out how sites such as ClickBank help websites make money by offering the opportunity for vendors and affiliates to promote websites and products.
  7. Personal Finance

    How Shazam Makes Money

    Prior to universal access to digital technology, identifying music in restaurants, bars, or stores was difficult to nearly impossible. Founded in 2000, Shazam provided a readily-available solution ...
  8. Personal Finance

    For a company, is it more important to lower costs or increase revenue?

    Examine the question of whether a company's desire for increased profitability is better served by focusing on cutting costs or on increasing revenue.
  9. Personal Finance

    How The Internet Web Ad Industry Works

    Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
  10. Personal Finance

    Tinder to Start Swiping for Cash?

    For two years, Tinder has been able to stay afloat without relying on any kind of revenue stream. Now, the free match-making mobile app is exploring a new money-making model in an effort to cash ...

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center