Value Proposition

The value proposition is the monetary value of the benefits offered by the product to the ultimate customer. For example, if I buy a vegetable peeler what is the value proposition for me? Well, with a vegetable peeler I can kill my vegetables faster and safer compared to using a knife to peel vegetables. How much are the benefits of the time savings and the increase in my safety worth to me. A product designer can estimate the time savings and how much my time is worth to me in order to come up with a value for the vegetable peeler.


Why is this value important? If a designer proposes a product that costs $100 when the customer values the benefits that product delivers at $10, the product will not sell well. How many $50 vegetable peeler’s have you seen for sale? Therefore, the value proposition gives us an idea of how much customer would be willing to pay for our product. This in turn limits the scope of our design project because we know how much a customer in our target market is willing to pay. Please note that product designer cannot claim all of the product’s value to a customer. For example, if I come up with a product that will save customers in the target market time that they value at $15 and I charge $15 for the product, how many will I sell?¬† These concepts should prevent you from proposing $100 solution to a $30 problem.

Some common examples of value include:

  1. Cost Reduction-help the customer to task for less money
  2. Brand/Status-Mercedes versus Toyota Prius versus Toyota Yaris
  3. Design – think of the user experience and how Apple commands a premium price for their products
  4. Customization – tailoring products to smaller target markets or even to individual customers
  5. Performance-a new product can have improved performance over existing offerings. For example hybrid cars generally get better gas mileage than cars powered by gasoline engines alone.

What is the value proposition for the product you are designing? How can you estimate the monetary value people in your target market will place on the benefits your product delivers?

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