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Topic: Student Questions

Value Prop Or Positioning Statement

Posted by Anonymous on 9/27/2005 at 7:21 PM ET 250 Points
Are they one in the same? I'm looking for a concise definition of each.
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  • Posted by wnelson on 9/27/2005 at 7:35 PM Member
    Murphy,

    No, they are not the same. The position statement is a part of the strategy and communicates to those inside the company the any and all of the following:
    • Placement within a market segment

    • Placement of the product relative to other products categories and application
    • Placement versus competitors' products

    • Placement of the product in terms of features and benefits

    The position statement is critical to have in place before the marketing "production" work is completed because it ties everything together.

    A value proposition is an element of the position statement and is the summary of how the well the product/service meets or exceeds the customers' needs versus the competition. Sometimes, though not always or necessarily, this can be put into economic terms - dollars and cents. For instance, if a component takes the place of 5 other products at a cost of $17 and the cost of assembling the 5 components is $5 versus $3 for the single component in a system, the value proposition for that component's value proposition is the cost of 5 components - $17, plus the difference in assembly cost - $2 for a total of $19.

    I hope this helps.

    Wayde
  • Posted by mgoodman on 9/27/2005 at 8:02 PM Accepted
    Wayde has done a good job of explaining the difference.

    That said, the two terms are closely related and often used (in error) interchangably. The way I think of them is this:

    POSITIONING focuses on the benefits (and end-benefits) and the reasons someone should buy the product/service. "Buy this product and you will look and feel younger."

    VALUE PROPOSITION compares those benefits to the price/cost and "makes a deal" with the customer: You pay $250 and spend three months using my product, and you'll lose 20 pounds."

    The POSITIONING is entirely in the customer's mind. It's the mental image they have of your brand. The VALUE PROPOSITION is both what you promise and what they think you've promised as your deal with the customer.

    In the ideal world, you promise them your positioning benefits for a stated price, and they understand the deal exactly as you presented it. Unfortunately, it's usually not an ideal world, and there are differences. For example, the retailer might charge a premium or discount the product and change your value proposition.
  • Posted by SRyan ;] on 9/28/2005 at 3:30 AM Member
    Commonly used marketing definitions:
    www.buildingbrands.com/definitions/marketing_definitions_index.shtml

    Glossary of sales, marketing and related terms:
    https://straightforward-marketing.p5.org.uk/glossary.htm

    KnowThis.com presents categorized links to sites offering glossaries and listings of important marketing terms:
    www.knowthis.com/general/terms.htm
  • Posted on 9/29/2005 at 11:54 PM Accepted
    They are not the same, but they should be consistent.

    Value proposition -- expresses the difference between what the customer pays and the financial, functional and emotional benefits that they receive in return.

    Positioning statement -- expresses what you want to be, to whom, under what competitive conditions.

    First do your value proposition. Then do your positioning statement.

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