Example of Unusual Great Value Proposition

Big businesses have extraordinary offers or value proposition. The offer is tempting to consumers, and competition is difficult to imitate. You are also difficult to imitate. But by studying various kinds of offers from big businesses, hopefully, you can find and make offers that are also extraordinary, useful and difficult to imitate competitors.

1. Body Shop

It is brand proposition of body shop: Embed social activism in business. The company has a great name because it associates with social activism. They reduce not the first social activism. Although she copied the brand name and the idea of recycled packaging from a U.S. company in 1976 and had only accidentally practiced social activism 10 years later, Roddick introduced the idea of creating stories behind cosmetic products.

2. Microsoft

Microsoft is not the first GUI operating system. But they realize ubiquitous computing.  Although not an early pioneer, Gates has introduced operating systems into the mainstream since 1975 and arguably made software an essential part of computing by taking advantage of the network effect.

3. Apple

It is the unusual offer of Apple: Transform how people enjoy technology. They transformed the computing, music, and phone industries by introducing the Mac (1984), iPod (2001), and iPhone (2007) with cool counterculture approach; also reinvented animation pictures with Pixar (2006).

4. IKEA

IKEA have original brand mission : Make stylish furniture affordable

They create affordable price and smart furniture. They produce it by creating mass foldable furniture and distribute it in self-service retail shop. It reduces production cost and retailer shop.  For customer, it gives affordable price and self-service experiential stores (in the 1960s) and smart.

5. Virgin Group  Richard Branson

Founded by Sir Richard Branson, Virgin have brand mission: Bring excitement to boring industries. They will give business with risky and diverse ventures under the single brand name since 1970, Virgin Group;  They applied unconventional 400 business practices company-wide. our core consumer sectors of Travel & Leisure, Telecoms & Media, Music & Entertainment, Financial Services and Health & Wellness. They recently attempted to create commercial spacecraft with Virgin Galactic (2004).

6. Walt Disney

Almost all children in the world like Walt Disney.  Their brand proposition is Create magical world for families. That proposition energize and inspire the company to create great things. They created successful animated characters and brought them into mainstream business with licensing and theme park experience.

7. Southwest Airlines

Although he got his ideas about the low-cost airline model and corporate culture from Pacific Southwest Airlines (established in 1949), Kelleher has brought low-cost airlines into the mainstream since 1971 and inspired worldwide adoption of the business model.

8. EBay

Connected sellers and buyers with eBay (1995), facilitated transaction and governance with user ratings and inclusion of PayPal as a subsidiary (2002)  Ebay have motto: Create user-governed market space.

9. Google

Since 1998, Google has been reinventing the search engine redefined online advertising people enjoy search engine-based advertising platform. Make the world’s information organized and accessible

10.Wikipedia

Since 2001, Wikipedia has been redefining the encyclopedia and popularizing the collaborative wiki approach developed by Ward Cunningham (1994)Create a publicly editable encyclopedia.

11. Facebook

Facebook Although he did not invent social networking (Friendster was introduced first by Jonathan Abrams in 2002 and MySpaceby Chris DeWolfe and Tom Anderson in 2003; Facebook was introduced later in 2004), Zuckerberg expanded the idea by introducing Facebook Platform (2007) and Connect (2008)and expanded social networking to a wider presence

12. Linkedin

What unusual offer that Linkedin provide? Reid Hoffman creates Linkedin to connect professionals around the world. LinkedIn introduced online professional networking and new ways of organizing professional contact information; someone says it will soon replace the traditional resume for job search. 

13. Twitter

What Benefit that Twitter offer?  Build by Jack Dorsey, Twitter provide the tools to track friends and other interests. Established in 2006, Twitter pioneered the idea of mini-blogs on the Internet and how people can broadcast their ideas to their network.

Principle of Business Development

Since the early of civilization,  human beings have known that business has an important role to reach wealth.  Business gives what individuals and society need.  Today, people learn business to get sustainable money. There is a lot of article and book about business, include my article about business development steps. So,  it’s not easy to recognize what matters from the business.

Studying business from business history gives insight into what’s important in business. History shows something that always exists in the development of a business.

The important thing in the business is efficiency and sharing benefits competitively. Efficiency allows entrepreneurs to get profit from the business transaction. It also helps entrepreneur offer a good price.

how to do business efficiently?

The way to run it is by specialization, the scale of production, and create more fit between customer problem and company solution. So continuous market research is important to create the best-fit offer. Business tells the offer in copywriting format or advertising in several media channel.

Specializing for efficiency

Since barter trading, people know that business needs efficiency. At that time efficiency is achieved by specializing in production. Specialization and focus in creating a product encourage people to produce products quickly, cheap and good. Because he has put his time and energy into a field, he will find a better, faster and cheaper way to compete in a market.

Because specialization is efficient, the state tends to specialize in its core business areas. The city also has its own specialization.  specializes, villages specialize. That specialization does not have to be a whole country or city only make one product, but there is a dominant product.

Adam  Smith developed the idea of specialization for this efficiency by offering a division of labor. When within the company, there is a division of labor, with a smooth production flow, then productivity will good and growth occurs.

For efficiency too, Ford advised workers to be obedient without thinking, so that the conflict between the management team and the workers is minimized.

With the division of labor, the employees will handle the tasks easily and quickly mastered the production process.

Today, specialization is not only in production house but also they produce for specific market. Therefore, they do segmentation and choose specific market segment.  By target for the specific market, the business can make attraction offer, because they program their products for the specific segment.  To match

Large production scale for efficiency

Creating large quantities of products will reduce production costs per product. In addition, producers can also press profit margins, in the hope if the goods sold a lot, total profits are also many.

The production cost of a product has fix cost and variable cost. Whatever quantity of product that we made, fixed cost does not change, not multiply. And the variable cost increases when quantity also increases.

Machinery for Mass Production

Consequently, after a business has an orientation to mass production, they need technology, machine, teamwork, and market that they buy.

Humans are constantly looking for ways to enlarge the scale of production, using animal power, heavy machinery, and computers, aiming to increase mass production.

Teamwork for Mass Production

To manage large machine and large market, they then need a team and manage them. Therefore, business needs leadership and management discipline.  Vision make the team more cohesive tea

 

Start Business Development Journey

This article covers business examination. It is first steps to business development journey. To begin business development, we need to examine our business condition. No the development plan that fits all condition.  You already have the progress of business development, so you just fix the missing. We start to examine:
  • your company profile
  • Segment market
  •  business model to serve your market and get profit
  • team support
  • marketing plan
  • management and
  • continues improvement.

Your Company Profile Today

  • What is your company name
  • Company Address
  • Company mission and mission
  • When your business start
  • Business type: Franchise  or you build your own
  • Business type:  retailer, producer, distributor?
  • Industry type
  • Market segment you serve
  • products and services that you offer
  • percentage of the end user and business customer
  • structure organization
  • the quantity of team company
  • Top 5 Important things in your business
  • your performance for your top 5 important things
  • Do you apply bookkeeping and accounting?
    • Your Profit Loss Financial Report in last 5 years
    • Your Balance Sheet in last 5 years
    • Cash flow statement
    • aged debtors listing
    • aged creditor listing
    • sales analysis
    • inventory
    • Others
  • How often you update your financial status? daily, weekly, monthly, yearly
  • Do you have the business plan or business model canvas

Your Private Goal in Your Business

  • Your job, status, and role in the business
  • Your salary: fixed salary and variable salary
  • Your non-financial benefit in the business
    • why you enjoy or like  your business
  • 3 thing most frustrated things in your business
  • Time spend in the business
    • time for production
    • Time for team building
    • Time for marketing
    • time for administration

Market and Products

  • Your Criteria to target customer segment
  • Who is the best customer? What are your criteria
  • customer segment that you target
  • products and services categories do you have
  • your competitor can and easy to imitate or not
  • your sales per categories products and products per annum
  • sales trend per categories products and products
  • do you regularly hear customer feedback about products, service
  • Why your customer buy  (reason)? eg, quality, service, function, price.
  • Why your prospect does not buy (reason)
  • What is your value proposition
  • Major customer disappoint about your business
  • The quantity of Total customer
  • Total customer retention
  • Total customer repeat
  • Do you have customer lifetime value
  • Average how many

Competitor

  • How many Competitor that your customer can access
  • How many businesses that offer replacement items
  • Comparison of your business and competitor in term turnover, brand, capital, cost, profit, skills, service etc.
  • Common competition basic in your industry
  • Your competitive advantage

Finance

  • Total income per annum
  • Total expenditure per annum
  • Gross Profit per annum
  • Fixed Cost per annum
  • Variable cost per annum
  • cash flow statement

Entry and Exit Barrier

  • startup capital
  • skill to run the business (production, marketing, management)
  • license to run business
  • Attractiveness and main advantage of business
  • Cost for exit barrier
  • Difficulty to enter an alternative business
  • Difficulty to get material, supplier  and qualified people

Team Empowerment

    • Customer Orientation level of team
    • Trust and service culture
    • Recruitment procedure and consideration
    • The main difficulty to recruit
    • Team Training
    • Training and orientation for new employees
    • regular training for old and new employees
    • Written and clear job description
    • Key Performance Indicator of team training
    • Main training problem
    • Performance target for each member or team
    • The main indicator of the performance of each member, division, and team.
    • How to measure their performance
    • satisfaction level of the team member for their job and remuneration (salary)
    • How business give remuneration
    • How often to review remuneration
    • The non-financial reward for good performance for the team member
    • Profit share scheme and incentive for a team
    • What is the area of team participation in management?  product development, market development, strategic management, finance management.
    • regular team meeting and team feedback channel
   

Choose Profitable Customer Segment

Choose customer segment is the second part of business development strategy. It is a powerful concept that makes your business more efficient. This article talks about the benefit of segmentation. I answer about what is segmentation, type of segmentation, how to segmentation.

Benefit of Segmentation

To get customer segment, we first do segmentation. That enables us to choose the best segment. Segmentation and targeting is a tool for reducing money/time and competitive strategy. Without segmentation, the business cannot measure their marketing cost, because too much.

Increase Efficiency by Segmentation

Imagine you as a marketer want to sell diapers. You have limited budget and time. Do you offer the diapers to everyone? That is a bad idea, because of that exhaust unpredictable time and money. Cost almost unlimited. Who will buy your products? Every one? Not everyone needs diapers. It also applies to others products. Not everyone needs same pizza, clothes, and school. So, marketers identify distinct segments of buyers or segmentation. They identify demographic, psychographic, and behavioral differences between them. They also quantify the group of similar They then decide which segment(s) present the greatest opportunities. For each of these target markets, the company develops a market offering that it positions in target buyers’ minds as delivering some key benefit(s). Volvo develops its cars for the buyer who concerns mainly to safety. The company decides a positioning for them as the safest a customer can buy. Porsche targets buyers who seek pleasure and excitement in driving and want to make a statement about their wheels. To sell diapers efficiently, we need to classify, and choose who most probable groups of customer that need diapers? You don’t sell it to everybody, but the only group that has baby and toddler. That is segmentation and targeting. Customer segment of diapers is family that have baby and toddler. That strategy reduces cost and time.

Competition Strategy by Customer Segment

Another benefit of the segmentation is competition.  Segmentation enables targeting. How to compete with another diapers products? There are several alternatives using segmentation. First, go to a geographic area that you can compete or it has no diapers. Second, we break down diapers customer group to a more specific characteristic, for example, economic status. Instead of competing to generic diapers, it is better to compete with a more specific customer that you can serve better. If you can serve high class better, that is the best choice for you to create products that suit the specific segment customer that you choose.

Segmentation Inspire Market Opportunity

Usually, people think business idea is products. If we search business idea in search engine, that is about products and service. Usually, people check products idea, whether it is high competition or low competition. That is not enough. Even you see some products is over service or high competition, it seems no opportunity.  Segmentation helps us see the opportunity. Segmentation is divide market based on need, want and demand. The concept assumes that customer differs in:
  • the products benefit that they want.
  • Product specification that they want
  • Communication Channel which usually they use to get information that influences their decision
  • Amount of cost or price they are able to buy
  • Time and location that they want to buy
  • Quantities that they want to buy.
That mean, even very high competition, if we divide market based on more specific need, we can find opportunity. Not all customer needs the same benefit, specification, and price. So if you found the unsatisfactory big market, that is an opportunity to offer your products. Segmentation also evaluate profit prospects That is a benefit of segmentation.

What  is Segmentation

Segmentation is dividing the market into several levels of interest and power to buy.  The result is customer segment. That is a definition if you have existing products. If you have no products, you will decide the products later.  First, you make segmentation. You divide market based on your ability to provide and purchase power of the market. You scan several markets, then you decide which segment that you can serve and potential.

Main Category of Segmentation

The main category is end user (customer), trader or producer (business)? In a new term, B2C (business to customer)  or B2B (business to business)?

End User Segmentation

Geographic
  • Customer location
  • Region
  • Urban / rural
Demographic
  • age
  • gender
  • occupation
  • social-economic group
  • education level
Behavioral
  • benefits sought
  • rate of usage
  • Loyalty status
  • Readiness to purchase
Psychographic
  • personality
  • lifestyles
  • attitudes
  • class
customer segment

Segmentation in Business to Business

We can target segment market to business to business. Demographic
  1. Industry: Which industries categories that you target?
  2. Company and business scale: What scale size companies should we serve?
  3. Location geography: What geographical areas should we serve?
Operating Variables
  1. Technology. The technology that customer use triggers specific need: What customer technologies should we target on as segment market? What kind of technology that has a specific need that you want to serve.
  2. User-specific machine or something needs specific need. The frequency of using something also has a specific need. It is segmentation. The user or nonuser status: Should we serve geek users, medium users, rare users, or nonusers?
  3. Customer capabilities also have a specific need: Should we serve special customers based on their capability needing many or few services? Purchasing Approaches
  4. Purchasing-function organization: Some of the business organization rely their decision on purchasing on purchasing division. Another organization relies decision on purchasing at the boss. Where is the type of company that easy to accept your offer. Should we serve companies with a highly centralized or decentralized purchasing organization?
  5. Power structure: Company has several types of dominance perspectives. The type is technology perspective, financial perspective, worker perspective, boss perspective, customer perspective. What perspective that dominated in a company? What kind of company that easies to accept your offer.
  6. Consider your existing relationship. Maybe they can be your customer segment that easies to access and persuade.
  7. Purchasing policies: Should we target companies that prefer specific term of payment.
  8. Product criteria: Should we target companies that prioritize price? quality? Service? Situational Factors
  9. Urgency: Should we serve companies that need fast or slow delivery or service?
  10. Modularity: Should we target a company that tends to apply a certain application of the product. So they need specific function and price.
  11. Retail or trader: Should we focus with or without minimum order? Personal Characteristics
  12. Similarity: Should we target companies whose similar values to ours?
  13. Attitude toward risk: Should we target risk taker company or not?
  14. Long-term relationship to Supplier: Should we target companies that tend to maintain a long-term relationship?