A value proposition in business and marketing is a statement summarizing the customer segment, competitor targets and the core differentiation of one's product from the offerings of competitors. A company's market contribution normally extends further than its core product to include services, programs and systems rudiments. Value Propositions essentially translates this market offering into a proclamation of the benefits a customer will derive.
It was important for Toyota when developing their value proposition that it was clear and concise. Toyota may have started by brainstorming and focusing on the needs their target demographic group had in common. They would have done some market research.
Toyota's value proposition to prospective buyers of its Prius was "A car that sometimes runs on gas power and sometimes on electric power, from a company that always runs on brain "power". Their ads after introduction went further by stressing tag lines such as "When it sees red, it charges"
The company's value proposition does all to differentiate the Prius and Toyota as "environmentally friendly", also appealing to those consumers who complain about gasoline prices. The value proposition does much to stress on the technology aspect of the car, reaching out to the "techies". Toyota has determined that the common denominating of an un-met need here, which is, that North Americans love their cars and readily accept change especially if it is based on material comfort and their physical well-being. The company has therefore based that value proposition around that need. Toyota's value proposition creates a strong differential between the company and its competitors. It should also gain market share in the targeted segments, and definitely draw attention to the new Prius. Toyota's value proposition delivery will be successful through well-designed and executed organizational marketing and go-to market channels.
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