A value proposition can apply to an entire organization, parts thereof, customer accounts, or products and services.
Then in the first two decades of the 21st century, it communicated its second value of providing the customers with a reliable, smooth, hassle-free user experience within its ecosystem ("Tech that works").
[7] A value proposition is a statement which identifies clear, measurable and demonstrable benefits consumers get when buying a particular product or service.
This proposition can lead to a competitive advantage when consumers pick that particular product or service over other competitors because they perceive greater value.
In a modern, clear-cut definition, Labeaux defines a value proposition as a statement that clearly identifies what benefits a customer will receive by purchasing a particular product or service from a vendor.
[8] Viewed from the perspective of two dimensions of performance (quality) and price, there are usually five value propositions upon which companies can position their products or services.
Tjan includes provision of "must-haves" as a further type of value proposition, which customers are compelled to accept from somewhere in order to meet a critical need.
[9] Creating and delivering value proposition is a significant issue that marketing planners need to consider in planning strategies.
As a result, companies are pressured to invest more resources in marketing research; allowing them to gain deep customer insights and, thus, improve value proposition.
This concept was developed by Robert Kaplan and David Norton in 1990, to help communicate value proposition in a way that businesses can understand.
Many businesses that can answer these will have a relatively strong value proposition as they know how their product or service differentiates from competitors.
But it is more than just understanding and recognising what makes them different; it is about creating a statement that engages customers to purchase goods or service.
These customers demand, and are willing to pay for, a sales effort that creates new value and provides additional benefits outside of the product.
Furthermore, it defines the relationship between: the performance attributes of products or services, the fulfillment of the needs of particular customers and the total cost.
Customers are willing to pay in several circumstances, a few examples being; when they are faced with different offers, when they are in a partnership with the supplier, when the need to buy is urgent, when there aren't any substitutes, and when there is a high positive relationship between the value perceived and the price.
[17] The study concluded that perceived value is the customer's overall assessment of the utility of a product based on perceptions of what is received and what is given.
[20] Kambil and Baragheh claim innovation is a phenomenon that requires a multidisciplinary approach for analysis due to its sheer complexity.
Amazon has evolved through diversification from their struggling brand prior to the internet bubble burst in 2000, allowing for a great example for analysis and explanation of the potential innovation resulting from value proposition.
[citation needed] Innovations implemented by Amazon[citation needed] included features like the possibility to search among books based on not only book titles, but also keywords spread throughout the content, reducing the consumers time and energy for finding their desired item.
Another innovation[clarification needed] was the patented “one-click” feature, allowing customers to efficiently purchase goods without having to repeatedly submit their payment and shipping information.
All of these minor adjustments over time were the result of developing value proposition, ultimately leading to the success that Amazon.com is today.
[citation needed] Lindic has developed a PERFA framework to evaluate this concept of value proposition in regards to innovation.
[27] Innovation may, therefore, add to the value proposition for customers by performing in accordance with the standard set for products and services.
It describes a firm's ability to reallocate and reconfigure its organisational resources, processes and strategies as a response to environmental changes.
In other words, flexibility is materialised through the dynamic capabilities of a company which enable it to integrate, build and reconfigure internal and external competencies in order to face rapidly changing environments.
[citation needed][28] Affectivity addresses the feelings or emotions associated with working with a company or using its products and services.
In doing so, managers are able to identify key factors among the five perspectives of PERFA and make better decisions when deciding what to innovate so as to improve value proposition for their customers.