Five Ways To Develop Meaningful Value Proposition

Published in Philippine Daily Inquirer, May 13, 2005

One of the most important tasks a marketer faces, whether launching a new product or service or re-energizing a mature brand, is to find a value proposition that matters most to prospective customers.

Herein lie a number of challenges: one, the value proposition, also known as the brand’s positioning, must be differentiated from existing players in the market; two, the positioning must be relevant to the targeted market while ideally serving a latent need which current players originally failed to address; three, the value proposition should meet the needs of quite a huge, untapped market making it profitable for the firm to introduce the differentiating benefit; fourth, a superior differentiation cannot be immediately copied even by chronic me-too brands thus, allowing the innovative brand to recover much of its investment before others join the fray; and finally, buyers must be willing to pay for the differentiation while perceiving the product or service as affordable.

While the preceding defines the criteria behind successful competitive differentiation, nonetheless, the task remains daunting, often leaving many marketers confused.

Following are some marketing strategies aimed at exploring and identifying meaningful value proposition:

Dialectic way. This means moving along the opposite and un-traveled path. Most marketers prefer the comfort of incremental innovation i.e., new flavors, new scents, new colors, etc. while promising the same benefit everybody does in a category. Not so, the innovator, who willingly adopts disruptive innovation in a desire to change consumer and market dynamics. An example is the recently introduced OraCare mouthrinse, a no-sting, and non-alcohol based mouthwash with stabilized chlorine dioxide that gets rid of odor causing bacteria in hard to reach places in the mouth. Present users of mouthwash brands associate a brand’s stinging sensation with product efficacy. Yet, there is an unserved segment of the market of lapsed or non-users of mouthwash preferring to compromise oral hygiene simply because they do not like the stinging sensation of most mouthwashes. OraCare mouthrinse addresses this latent need with its breakthrough mouthwash that freshens breath without the stinging sensation.

Intuitive Way. This requires keen understanding of the target market and sensitivity to their needs. Key is to explore ideas behind the brand and validate it through consumer market research. Star Margarine expanded its usage from a sandwich filling to a rice mix while validating the concept through ethnographic research. In the process, the brand business grew beyond the bread market.

The Maslow Way. Abraham Maslow’s needs hierarchy provides a model for differentiating multiple brands belonging to the same company allowing said brands to co-exist. For example, Procter& Gamble Inc. has multiple toilet soap brands including Ivory Soap for mild, basic cleansing (physiological need); Safeguard (safety need) provides protection against germs; Zest for family use (social need); Camay for the self-assured woman (esteem need); and Oil of Olay for the mature woman who thinks beyond herself (self-actualization). Likewise, the needs hierarchy model applies to single brands. Recently, McDonalds in support of public health advocacy has shifted to a safety platform when it launched its new global marketing campaign that promotes “eating right and staying active”. Along with its international television campaign featuring tennis athletes Venus and Serena Williams and snowboarding champ Crispin Lipscomb, the brand’s ambassador of goodwill, Ronald McDonald also embarks on a lifestyle mission. Dressed in a yellow and red colored workout gear, Ronald McDonald exhorts kids to pay attention to what they eat and maintain an active lifestyle.

The analogic way. Another way of exploring differentiation is to look at other best practices and dominant brands in other categories and use these models, when relevant, as a benchmark for one’s own category and brand. For example, Disney’s brand of thematic experience and entertainment has become the model for quite a number of casual dining restaurants and even coffee shops. Professional baristas don’t just mechanically stir coffee; there is rhythm, movement and even subtle entertainment in their coffee preparation.

Intel realized the opportunity gain of branding its microprocessors, looking outside of the industry. Intel meticulously studied ingredient branding using as benchmarks other ingredient brands like Teflon, Dolby stereo and Nutrasweet.

The Customer Needs Analysis (CNA) Way. Many brands have been developed in response to customer needs and the lack of existing brands that address these needs. Mattel’s Barbie first came about in 1959 when its originator Ruth Handler saw her daughter, Barbara playing with paper dolls. She realized the potential of a three-dimension doll, where none existed at the time, that projected every little American girl’s future dream. In her nearly 50 years of existence, Barbie has had more than 70 careers, truly representing what is today
a multi-faceted woman.

Defining the brand’s competitive differentiation boils down to the marketer’s choice. Knowing one’s prospective market very well and being sensitive to their needs helps the marketer pick the right strategic differentiation.