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Value Proposition and Revenue Models

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...

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Value Proposition and Revenue Models

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  1. Value Proposition and Revenue Models Charles Frisbie - Marketing

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

  3. Revenue Models AND How can I make money?

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

  5. 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.

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

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

  8. 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.

  9. Example Netflix: Watch anywhere. Cancel anytime. 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.

  10. 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.

  11. 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.

  12. 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?

  13. Product/Brand Positioning

  14. 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

  15. Brand Premium

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

  17. 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.

  18. 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.

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