Marketing Terminology
Value Proposition:
Is the promise that
differentiates us in
the market place.
Positioning:
Is the high-level
promise we convey
to customers
Messaging:
Is how we
creatively
advertise our
positioning
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Elements of a Value Proposition: Balance
What’s in
it for me?
Promise
Why is yours
better?
Price
Differentiation
Effort
Pillars w/Support
Why should
I believe you?
What does it
cost?
Target
Audience
Risk
What do I need What could go
to do to make
wrong?
it useful?
Is this for me?
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Gmail’s Value Proposition
Gmail is a free, search-based webmail service that includes 1,000
megabytes (1 gigabyte) of storage. The backbone of Gmail is a powerful
Google search engine that quickly recalls any message an account
owner has ever sent or received. That means there's no need to file
messages in order to find them again. When Gmail displays an email, it
automatically shows all the replies to that email as well, so users can
view a message in the context of a conversation. There are no pop-ups
or untargeted banner ads in Gmail, which places relevant text ads and
links to related web pages adjacent to email messages.
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Dissecting the Gmail Value Proposition
Promise
Power and elegance of Google search, now applied to email
Audience
People who already use Google
Power users who get lots of e-mail and need powerful search
People who like convenience of web-based mail but hate its limitations
Differentiation
Google search engine technology
Replies in context of conversation
Virtually unlimited storage
Pillars
1 GB storage
Google brand equity
Price, Risk, and Effort
Free, supported by advertisers
But ads will be relevant to context, and unobtrusive
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<Product> Value Proposition for <Market Segment>
Target Audience: Primary: <Business Decision Makers &
Promise:
Technical Decision Makers>, Secondary: <Partners>
<Product name> is a <definition> that provides <benefit>, <for whom and that does what>, <resulting in what outcome>
Differentiation
Pillars
<Most
important
Customer
need 1 >
Competitive/
Alternative
solution
How is <your product name> different?
1
State how your product versus is better
for the customer in terms of addressing
this need than competitor 1.
2
State how your product is better for the
customer in terms of addressing this need
than competitor 2.
3
State how your product is better for the
customer in terms of addressing this need
than competitor 3.
Supporting Points
validating
differentiation
Identify proof points
or supporting
statements to
substantiate your
differentiation claims
in the eyes of the
customer.
Customer Effort & Risk
Required
State what the customer is
required to do to acquire,
implement, or integrate your
product for their usage in their
environment and what the
risks are.
Be realistic and include any
differentiated advantages.
Repeat this for the top 3-5 pillars that are your strongest
solution points that the address the issues that the
customer cares about when considering if your solution
will address their need.
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Levers to strengthen value proposition
Provide more
compelling
benefits
Promise
Add or strengthen
points of
differentiation
Reduce pricing or
change pricing
model
Price
Differentiation
Effort
Pillars w/Support
Provide Independent
(trusted) data/proof
points
Target
Audience
Find more receptive
sales prospects
Reduce
perceived
effort to buy,
deploy, or use
Risk
Eliminate or
reduce
perceived risks
to buy, deploy,
or use
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From Value Proposition to Positioning
Positioning is derived from the value proposition.
It is the way you choose to communicate the
differentiated promise to customers.
Positioning focuses on outbound marketing &
sales (what we say to customers) as opposed to
inbound direction (what we need to
communicate for engineering)
Positioning guides development of messaging
themes for marketing communications.
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From Value Proposition to Positioning
Positioning: A formal definition
A high-level promise statement that defines how
we want target customers to think and feel
about our offering relative to competing
alternatives, and the key customer perceptions
we want to create or change.
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Product positioning aimed at customer
The position is the place you want your
offering to occupy in the hearts and minds
of customers relative to alternatives they
may consider.
The position is defined in terms of key
customer perceptions you want to
change or influence.
Positioning emphasizes the competitive
frame of reference and the key
differentiators from a customer
perspective.
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Customer viewpoints: From Mind to
Heart
Emotional benefits
How it makes
you feel
FEEL
(HEART)
• TCO (Total Cost of Ownership)
• EVC Economic Value to Customer)
• ROI (Return on Investment)
• Reduced time
• Reduced cost
• Reduced errors
• Increased productivity
Customer
THINK
(MIND)
Economic benefits
What it means in time and money
• Style
• Self-actualization
• Self-expression
• Control
• Freedom
• Independence
• Affiliation
• Capability (Quality/Performance)
• Reliability
• Flexibility
• Maintainability
• Usability
• Upgradeability
• Interoperability
• Disposability
Functional benefits
What the product does
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Positioning as “taking hills”: Volvo
2. Luxury
Luxury
Style
Style
Reliability
Performance
1. Safety
Reliability
Safety
Performance
Affordable
Affordable
1. Attributes: Baseline of positioning attributes is all of
the attributes by which the audience views the market
landscape in which all competitors hold a position.
Emotional Benefit:
Peace of Mind
Functional Benefit:
Protects My Family
Attributes
Safety
Luxury
Features
Safety
- Inflatable Side Curtains
2. Identify ‘hilltops’ that can be credibly owned by your
brand. In the case of Volvo, the brand naturally owns
safety, but needed to add another dimension, luxury, to
compete against imports such as BMW and Lexus
- Whiplash Protection Seats
- Deformation Zones
Luxury
- Bi-Xenon Headlights
3. The positioning builds an
emotional benefit around the
combination of ‘hilltop’ attributes
that yield a functional benefit.
Features scroll up to the
functional benefit
- 8- way adjustable lumbar seats
- Audio-Max stereo system
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Example Positioning
Short Message
One sentence that you can easily say…not a long run on sentence.
Extended
Message
Paragraph that explains what your product is in more detail. Describe differentiated benefits to customer and the resulting value to the
customer.
Target
Audience
Primary: Car Purchaser
Secondary: Other drivers of the car
Detailed
Positioning
Statement
Top
Customer
Needs
Pillars
Differentiated
Benefit
For <auto buyers and drivers>
Who <want a car that provides safety and comfort to that protects the family without sacrificing the latest comfort features.>
<Volvo offers safety and luxury>
That <is affordable in a reliable vehicle>
Unlike <higher priced luxury auto manufacturers, Volvo surrounds the driver and its passengers with safety and luxury.>
Pillar 1 <Piece of mind & protects my family>
Specific unmet needs (pain points):
• Want latest security features available on the market.
• Don’t want to have to sacrifice security to also get luxury features as well
• Car needs to fit primary driver and secondary driver’s desires.
Piece of mind & protects my family
Pillar 2
Pillar 3
Volvo has superior safety features
such as inflatable Side Curtains,
Whiplash Protection Seats, and
Deformation Zones
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From Positioning to Messaging
Messaging is way you articulate the positioning
verbatim in the advertising campaigns you create
for specific segments and audiences.
Key points
Messaging is creative, positioning is strategic.
Messaging is campaign-specific, positioning is
enduring.
Messaging is localized, positioning is global.
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How to get started? Research!
1a. Market Opportunity / Segmentation:
2. Concept Value Research:
Is there a well--defined and relevant target
audience?
Are the benefits inherently compelling?
How do we stack up against alternatives?
What will customers pay for the benefits?
What are the barriers and bridges?
1b. Habits & Practices Research:
What are unmet/unarticulated needs?
How important is a solution?
How are needs met today?
How good is existing solution?
Promise
Price
Differentiation
Effort
Pillars w/Support
3. Positioning & Messaging Research:
What is the best way to articulate the benefit?
What are the compelling differentiators?
What claims and proof points will be most
effective?
Risk
Target
Audience
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