What is "value proposition"

n. (context business management English) The benefit (such as profit or convenience) offered by an organisation's product or service.

A value proposition is a promise of value to be delivered and acknowledged. It is also a belief from the customer how value (benefit) will be delivered and experienced.

A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services.

Creating a value proposition is a part of business strategy. Kaplan and Norton say "Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation."

Developing a value proposition is based on a review and analysis of the benefits, costs, and value that an organization can deliver to its customers, prospective customers, and other constituent groups within and outside the organization. It is also a positioning of value, where Value = Benefits - Cost (cost includes economic risk).