Value and Value Proposition in Product Management

Origins of Value and Value Proposition:

The word "value" comes from the Latin word "valere," which means "to be strong" or "to be worth." It has been used in English since the 14th century to refer to the worth or usefulness of something. The word has evolved to encompass a variety of related meanings, such as the price of a good or service, the quality or worth of a person or thing, and the principles or beliefs that guide one's actions.

The term "value proposition" is thought to have originated in the field of marketing. The concept of a value proposition is widely credited to Harvard Business School professor Theodore Levitt, who first wrote about it in the 1960s. In his seminal article, "Marketing Myopia," Levitt argued that companies focusing solely on selling products rather than providing value to customers are likely to be short-sighted and miss out on new opportunities.

Levitt's idea of a value proposition was later popularised by management consultant and author Clayton Christensen, who used the term in his book, "The Innovator's Dilemma." Christensen described a value proposition as the unique combination of benefits that a product offers to its customers and how it differentiates itself from its competitors.

Since then, the concept of a value proposition has become a central tenet of marketing and product development and is widely used by companies to assess and refine their products and communicate their unique value to customers. Today, the term "value proposition" is widely recognised and understood in the business world and is widely used to describe the exceptional value a product provides to its customers.

What does the value from the product perspective?

The value from a product perspective refers to the benefits and attributes that a product provides to its intended customers and users. It encompasses everything that makes a product useful, desirable, and valuable to its target audience. This can include features, quality, design, performance, reliability, durability, brand reputation, customer support, and more.

A product's value proposition is a crucial factor in determining its success in the market, as it directly influences customer perception and decision-making. A strong value proposition can differentiate a product from its competitors and drive demand, while a weak one can result in low sales and market share.

When evaluating a product from a value perspective, it is essential to consider both the tangible and intangible benefits it provides and the needs and preferences of the target audience. This can involve market research, gathering customer feedback, and refining the product to meet evolving customer needs.

Steve Jobs, the co-founder of Apple Inc., was known for his passion for design and focused on creating products that offered a unique value proposition. He believed that a product's value proposition should be based on a deep understanding of the needs and desires of the target market and that the product should offer a clear and compelling solution to those needs.

Value Proposition explained with an example - "iPhone":

"The Apple iPhone offers a seamless and intuitive user experience, with cutting-edge technology and sleek design. With features like Face ID, a high-quality camera, and access to the App Store, the iPhone provides unparalleled convenience and connectivity, all in a compact and stylish package. Whether you're using it for work or play, the iPhone is the ultimate smartphone for those who demand the best."

In this example, the value proposition of the iPhone focuses on its user experience, technology, design, and convenience. It positions the iPhone as the ideal smartphone for consumers looking for a high-quality device to meet their work and play needs. The value proposition highlights the unique features and benefits of the iPhone, such as Face ID and the App Store, which sets it apart from its competitors and makes it a valuable product for its target market.

How do we educate the team on value proposition?

Educating a team on the concept of value proposition can be an important step in ensuring the success of a product or service. Here are some tips for effectively educating a team on the topic:

1. Start with the basics: Explain what a value proposition is, what it consists of, and why it is important. Make sure everyone on the team has a clear understanding of the concept.
2. Use examples: Provide real-life examples of products with strong value propositions to illustrate the concept and help team members understand how it can be applied in practice.
3. Encourage participation: Encourage the team to brainstorm and contribute their own ideas and insights on the topic. This will help everyone feel invested in the process and develop a deeper understanding of the concept.
4. Provide resources: Provide team members with resources, such as books, articles, and online courses, that they can use to further their understanding of the topic.
5. Incorporate value proposition into the product development process: Make sure the value proposition is considered at every stage of the product development process, from concept to launch. Encourage the team to continuously evaluate and refine the value proposition to ensure it meets the needs of the target market.
6. Emphasize the importance of customer research: Make sure the team understands the importance of conducting thorough customer research to understand the needs and preferences of the target market. Encourage them to use this information to inform the development of the value proposition.
7. Regular training and reinforcement: Provide regular training and reinforcement to ensure the team continues to understand and apply the concepts of value proposition.

By following these tips, you can help your team understand the importance of value proposition and how to effectively apply it in the product development process.