Smarter Pricing: How to capture more value in your market

The value proposition

Success comes from offering specific customers a clear combination of benefit and price that they will find attractive. A statement summarizing this targeted offer is called a ‘value proposition’. Its purpose is to unify the internal efforts to focus everyone on delivering a value package. Returning to the Nike example at the beginning of this chapter, an illustration of their possible value proposition follows:

• Precise benefits: a sense of superiority from performance sports shoes associated with winners.

• To which group?: ambitious, youthful people around the world.

• At what price?: 300 percent premium over basic athletic shoes.

Nike’s value proposition has identified the specific values that its customers seek. The company ...