Define value proposition. Describe its various elements

What will be an ideal response?

Value propositions clarify the unique value a product or service provides to its customers. They clearly state the
tangible benefits customers will enjoy as a result of using the product or service. Value propositions can tell us the
underlying motivations a customer has toward the product or service. Understanding customer motivations will
help us design the product or service, price it, deliver it through distribution channels, and promote it.
To complete the value proposition for our product or service, we need to determine the value proposition
elements—targeted buyer, customer's purchase motivation and use cases, name of product or service, category of
product or service, competitors, and differentiation.
Targeted Customer Segment: After identifying the targeted segment using the standard customer characteristics
like demographics and psychographics, we create several buyer descriptions, also called buyer personas, to
describe the type of buyer intended for this product. To be certain that the product or service is properly focused,
we can create a persona about a buyer whose needs will not be satisfied.
Customer Purchase Motivation and Use Cases: The next step is to state why customers purchase this type of
product or service (their purchase motivation). To understand the purchase motivation, as well as required product
or service characteristics, it is helpful to consider the usage scenarios the customer intends for the product or
service.
Name of Product or Service: We should select a name that is short, memorable, and has positive associations within
its category.
Category of Product or Service: Next, we state the category of the product or service in terms that the targeted
segment would use.
Benefits: We then state the benefits that customers will get from the product or service. To help describe benefits in a
customer-oriented way, it is worthwhile to separate benefits into two categories: head and heart. Head benefits are
rational reasons for buying a product or service, such as saving time or money. Heart benefits are emotional reasons
for buying a product or service, such as feelings of self-esteem when using it.
Competitors: Next, we list the competitors, both direct and indirect, for the product or service. Direct competitors
offer products and services nearly identical to ours, whereas indirect competitors offer products and services in
different categories, but still address the problem that the customer is trying to solve.
Differentiation: The next step is to state the characteristics that make this product or service distinct from similar
versions in the market.