Value Proposition and Revenue Models Charles Frisbie - Marketing

Value Proposition Who is my customer? What am I offering them?

Revenue Models AND How can I make money?

Value Proposition Positioning statement that explains what benefit you provide consumers: For... Who are dissatisfied with... Our product is... That provides... Unlike...

For...Target Market and Market Segmentation Demographic Segmentation Gender, age, income level Geographic Segmentation Country, region, city Psychographic Segmentation Traits, attitudes, interests Example: 25-28 year old male college educated rock climbers in Denver making over $100K.

That Provides...Generic Competitive Strategies Low Cost Best Value Differentiation (broad or focused)

Value Proposition Strategies Save Money Get Value Make Life Easier/Better Luxury/Status Appeal

Example Uber: Tap the app, get a ride Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And payment s completely cashless. For...People over 18 in urban areas. Who are dissatisfied with...current mobility options. Our product is...ride service via app. That provides...mobility seamlessly and easily. Unlike...taxis.

Example Netflix: Watch anywhere. Cancel anytime. For...everyone. Watch TV shows and movies anytime, anywhere - personalized for you. For...everyone. Who are dissatisfied with...cost and complexity of accessing entertainment. Our product is...streaming videos. That provides...personalized content on demand. Unlike...cable companies.

Example Dollar General: Save time. Save Money. Everyday! Dollar General is proud to be America's neighborhood general store. We make shopping easy and affordable with more than 12,500 convenient, easy-to-shop stores in 43 states delivering everyday low prices on name-brand products that are frequently used and replenished, such as food, snacks, health and beauty aids, as well as cleaning supplies, family apparel, housewares and seasonal items. For...price conscious shoppers. Who are dissatisfied with...big box shopping experience and prices. Our product is...a store with affordable staples. That provides...an easy shopping experience. Unlike...Wal-Mart.

Example FreshBooks: Small Business Accounting Software Designed for You The Non-Accountant Freshbooks is the only accounting software designed exclusively for service-based small businesses. Select an industry to find out how Freshbooks can work for you. For...service based small business owners. Who are dissatisfied with...overly complicated accounting systems. Our product is...accounting software. That provides...easy to use functions for non-accountants. Unlike...QuickBooks.

Product/Brand Positioning An effort to influence consumer perception of a brand or product Objective is to occupy a unique and advantageous position in the consumer’s mind. How does it relate to other brands?

Product/Brand Positioning

Brand Equity Value of having a well known brand Ability to generate revenue from brand recognition alone Greater brand value = higher profit margins Brand Premium = Price - Intrinsic Value

Brand Premium

Revenue Models: Monetization I have a product, how do I make money? Startups can’t always answer this question See: Snapchat

Revenue Models Production Model: Create product/service and sell it to consumer. Manufacturing Model: Manufacture product and sell to wholesaler. Construction Model: Build infrastructure or buildings for clients. Rental or Leasing Model: Rent something you own for money. Advertising Model: Provide content/service, sell ads. Commission Model: Charge fee for a mediated transaction. Fee-for-Service Model: Customers pay for services as used.

Revenue Models Licensing Model: Business owns content, sells licenses. Freemium Model: Provide something for free with upgrades. Wholesale: Buy from manufacturers, sell to retailers. Retail: Buy from retailers, sell to consumers. E-Tail/Mail Order - Sell directly to consumers via mail/delivery. Subscription Model: Consumers pay a flat fee for services.