The present day customers are expecting a lot more than products and services from business organizations. No longer can organizations expect to attract and keep the customers only with a good product or service. The traditional competitive differentiators like place, price and quality are still important but have lost their relevance as individual contributors, and individually they cannot contribute to the success of the organizations as in the past. Today, organizations are dealing with a customer who wants value from his transactions. This article examines the concept of value proposition, the drivers of value proposition philosophy, the process of creating value proposition, the value proposition strategies, and how CRM and value proposition complement each other.
Traditionally, businesses placed themselves in the right place in the value chain by providing the right products to the targeted segments. But the market place has become complex and
complicated with globalization, dynamic markets and new technologies. In the changed environment, simply producing goods or services or making them available at a place are not sufficient.
Value proposition can be described as the factor that motivates the company's customers to prefer and purchase products and services offered by them as a superior option after differentiating these products from those offered by the competitors. Traditionally, most organizations concentrated on the product features, and by providing a feature-rich product believed that they were providing a good value proposition to the customer.
The best value proposition can be delivered to the customer only if business organizations look at themselves not as product or service providers but as `value delivery systems.' The manufacturers and service providers are under pressure from the customers to offer better designed products of high quality at low prices with unmatched after-sales service. In response to these demands, most manufactures are reengineering their processes on a continuous basis to eliminate the dead wood and non-value-adding activities from their business processes. |
