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Definition: Customer Value Proposition
Customer Value Management was started by Ray Kordupleski in the 1980s and after that Customer Value and related attributes had gained popularity. Customer Value Proposition is a marketing term which is a persuasive statement for customers stating detailed benefits that customer will get after purchasing the product or service. It consists of the total benefits which a vendor guarantees that customer will get in return of customer’s associated payment. It basically describes why a customer should buy this product or use this service and designed to convince customers to buy and use them.
CVP not only designed to convince customers but also make a point of differentiation from other competitors. A strong CVP can be developed by firms to identify customer’s needs through market research and analysis of the market. A strong and successful CVP is directly related to actual and sustained competitive performance. Two attributes which leads to successful product and need to balanced are- Price and Quality. So, a product should offer value through either one or both of these attributes.
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