Definition of value proposition

The benefits that a product or service provides to customers, especially by being different to or better than a competitor's products or services. [1]

Customers face a choice when browsing a set of products and/ or services at various prices. The value proposition is the additional benefits the customer receives from a product/ service not offered by other competitors. The value proposition is a combination of the product and/or service and the price charged.

Example

For instance low-cost airlines, such as Ryan air and EasyJet, have a simple value proposition - point-to-point travel at cheaper prices when compared to traditional carriers flying on similar routes.

To be able to offer a reduced price, these budget airlines remove some traditional frills, for example, they only sell snacks and meals on board, instead of offering meals to all passengers as part of the ticket price.  This would also mean less time to clean up between flights leading to an increase in turnaround time.  These airlines tend to use secondary airports which are likely to be less busy and could also create a faster turnaround time. [2]

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