Question

Defined value proposition and discuss the importance of a value proposition and what elements affect its creation and implementation.

What is the value proposition of Dell Company?

Answer 1

In today's business world the survival of a business is very difficult. loyal customers are the main ingredient of the success of any organization. if customers are loyal then they spend money, recommend that produce or services to the others and repeat their buys from that organization. this delivers the consistent value to the organization. creation of value and the delivery of that value is very tough job for a marketing planner. value proposition is a very widely used concept and there is no specific definition of it.

value proposition can be defined as a promise which is made by the business entity to their customer that they will serve a bundle of values that are able to create benefits to the customer. it can also be defined as the set of experiences which has ability to create a differential in the decision process of customer to purchase the product which is offered by that organization over its competitors. simply we can say that it is a promise of value that is delivered by the organization to their customers over its rivals. value proposition is the reason of existence of a business, it is reason to be chosen over its rivals or competitors. value proposition of a company is included in its mission statement.

Importance of value proposition

if a business is unable to communicate their values to the customers and unable to tell the customers that why should they choose them and why they should pay to their business then they will be removed from supply chain altogether. value proposition is very important because

1. it has an ability to create a stong differentiation between organization and its competitors.

2. it is able to increase revenues.

3. it improves the operational efficiency of the organization.

4. value proposition increases not only the quantity but also increases the quality of prospective leads.

5. it is able to gain market share into organization market segments.

6. it is able to ensures that everyone who is connected to the organization is communicating the same message to their customers.

7. it sets the foundation of future business development.

8. it defines the customer relationship with the business entity and a part of the business plan.

9. it is able to increase the customer loyality

10. it is able to outperform the competition of organization.

elements which affects the creation and implementation of value proposition

there are basically four elements which affects the creation and implementation of value proposition of an organization i.e. product, customer segments, market fit and competition.

the product:- it is the core element of an organization in the creation and implementation of value proposition. before defining the value proposition company should ask question to itsels that what types of product they are going to offer to their customers and what will be the value of my product to the customers.

the customer segments:- it puts direct impact on the implementation of the value proposition. before the creation of the value proposition, bsiness entity should know about that who are their customers and does their product have features or values to satisfy the needs of target group. business entity should be aware from the need of the customers and how their organization will meet that defined need and expectations of the customer.

the market fit:- it is a very esential element of value proposition because befor creation and implementation of value proposition it is very necessary to know that is there any space in the market for that product which organization is going to provide their customers. it is very necessart to evaluate the potential of that market place in which company is thinking to enter.

the competition:- competition is directly attached to the value proposition. before the creation and implementation of value proposition it is quite necessary to know about the competition level in the market. whether the competition is tough or not, whether the same product or service is offered by the other competitors or not. after analysis this company should create that vlaue to the product or services which make them unique from other competitors. there should be something that makes their product more unique.

value proposition of Dell company

there are mainly four types of value proposition

1. product that is offered by us is unique.

2. price of our product is low.

3. we make things easier for customers.

4. we are ready to take ownership of the problem faced by the consumer.

Dell followed the second type of value proposition that is our price is low

the value proposition of Dell is that they will provide low cost customized computer direct to their customer's doors. Just in Time ordering system of Dell is capable to minimize the need to calculate the demand in advance and to mininmize the stock that's why Dell can keep lowest price.