The document defines a value proposition as: 1) A set of promises that a company makes to its target customers about the functional, economic, and emotional benefits they will receive. 2) These promises must be differentiated from alternatives that customers could choose, such as competing products, doing nothing, or sticking with previous versions. 3) For customers to believe the promises, a value proposition provides evidence and reasons to support the claims through objective facts, ratings, and third party endorsements.

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“THE CONCEPT OF VALUE PROPOSITION”
Let’s try to define very important concept that every marketer or most probably every company need to think
about. That is their customer value proposition.
Value proposition in very simple words is a “promise of value” that a customer can expect from your product
or from your company. Why should we call it promise? Because it is the anticipation of value that the customer
make the commitment to you before actually experience the value. Therefore you have to communicate this
to your customer in order for them to make that investment in your product/service.
So when we define the Value Proposition, we define it more precisely as:
 A set of promises that you make to a defined target audience
 That (promises) are differentiated from other alternatives that customers might consider
 And are backed up by reasons to believe
1: Thus the first part is that a value proposition is a promise. It’s a promise of value. Now this promise means
that your product or brand need to offer a set of benefits to customers. For instance, this is the answer to the
questions:
 What is in it for me (customer)?
 What do I get from your product, brand or company?
These benefits can be of three types:
 Functional benefits i.e. features and functionality the product might have
 Economic benefits i.e. time, money and saving customer might get
 Emotional benefits i.e. sense of emotions, feelings and affiliation that people might feel/associate with
the product or brand
2: Thus the promise is combination of these functional, economic and emotional benefits. Now the promise
that you make, needs to be compelling. Nonetheless these promises also need to be differentiated from the
alternatives that customer might consider.
Now what are these alternatives?
 The first thing is that a customer might choose to do business with competitor i.e. buying from another
brand or product
 Second point of reference for a customer is that actually might choose to do nothing i.e. you might
not choose to buy another car, another TV set, or a new laptop.

2.  The third point of reference is differentiation of yourself from yourself. It particularly applies to
technology companies i.e. if I am using office 2010. I am not in need to use office 2013. Thus
paradoxically you actually have to differentiate yourself from yourself, which is sometimes very
challenging.
Thus these are the three points of references for differentiation; the previous version of your own product, a
competing alternative, and status quo.
3: The final idea is that, when you specify this differentiation, you make claims. Now these claims needs to be
backed up by evidences. So the final part of value proposition definition is, the reasons to believe or support.
Now what type of evidences can you provide to back up your claim? Evidence can be objective features, For
instance if you say I have the world’s thinnest laptop. Then you have to actually define how thin it is? Another
kind of evidence that you can offer is third party rating i.e. rating agencies, ISOs and so forth.
In conclusion: we define the value proposition as a promise of value that you make to a specific target
audience, that (promise) is differentiated from alternatives that customer might consider and it is backed up
by reasons to believe.
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That in summary, what we mean by the customer value proposition!