A value proposition needs to very simply answer the question: Why should someone buy what you are offering? If you look closely at this question it contains three components: Who? The value proposition does not name the target buyer, but it must show clear value to the target buyer. What? The offering needs to be defined in the context of that buyer. Why? It must show that the offering is uniquely valuable to the buyer. How Do You Create an Effective Value Proposition? When creating or evaluating a value proposition, it is helpful to step away from the long lists of features and benefits and deep competitive analysis. Stick to the simple, and strive for focus and clarity. A value proposition should be clear, compelling, and differentiating. Clear: short and direct; immediately identifies both the offering and the value or benefit Compelling: conveys the benefit in a way that motivates the buyer to act Differentiating: sets the offering apart or differentiates it from other offerings

value proposition, defined as follows: "A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.[1]"

Competitors and substitutes force the marketer to identify the aspects of the offering that provide unique value vis-à-vis the alternatives. We refer to this as differentiation. Differentiation is simply the process of identifying and optimizing the elements of an offering that provide unique value to customers. Sometimes organizations refer to this process as competitive differentiation, since it is very focused on optimizing value in the context of the competitive landscape.

Marketing exists to help organizations understand, reach, and deliver value to their customers. In it’s simplest form, value is the measure of the benefit gained from a product or service relative to the full cost of the item. In the process of the marketing exchange, value must be created.