The Purpose of a Business is to Create Value

For a business to achieve market success, it must create superior value for its customers, collaborators, and the organization. Peter Drucker, the famed management theorist, stated that the purpose of business is to create a customer and that business enterprise has only two functions: marketing and innovation. Thus, the responsibility of creating value and winning customers falls on the shoulders of marketing.

The American Marketing Association defines marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchange offerings that have value for customers, clients, partners, and society at large. 

The Value Proposition Relationships

Since market success, at the strategic level, results from creating superior value for customers, it is the function of the value proposition to define the value of a brand offering for a target market.  Marketers seeking to design relevant value propositions for their brands must first understand the value—exchange—value-based relationships and define the relationships between the customers, collaborators, company, and competitors in any given market.

For example, consider the relationship a manufacturer has with a retailer and the relationship the retailer has with the target customer. The retailer (a collaborator) partners with the manufacturer (the company) to deliver products (a value) to the target customer. The customer receives value from the manufacturer by way of the product and the retailer’s value through the product’s delivery and service. Both the manufacturer and retailer receive value from the customer through the revenue generated by the customer. Additionally, the retailer gets value from the manufacturer through varied trade promotions granted by the manufacturer. The manufacturer receives the retailer’s benefit through the retailer’s services on behalf of the manufacturer, i.e., product advertising and promotions (See diagram below).

Value Proposition value chain strategic marketing diagram

The Optimal Value Proposition Critical Questions

The company, collaborators, and customers’ symbiotic relationship reflect only the company side of the value exchange. Marketers need to be aware of competitors who often work with the same collaborators and target the same customers. Both the competitors and the company’s value exchange are balanced. Thus, to be successful, marketers must craft the optimal value proposition —balanced value — for customers, collaborators, and the company.

Before creating a balanced value proposition, the marketer must evaluate the market potential of an offering by answering three critical questions:

  • Does the offering create superior value for target customers relative to the competitive offerings? In other words, are the products and services offered perceived to be superior to that of the competition?
  • Does the offering create excellent value for the company’s collaborators relative to what the competition is offering? Is the manufacturer providing a better overall value to the retailers? 
  • Does the offering create superior value for the company relative to the other options the company must generate to pursue this offering? Does the benefit the company receives outweigh the costs to deliver the product or service?

In a survey on MarketingCharts.com, 87% of global brand managers and CMOs agreed that an aspect of their overall brand strategy is to include a brand story and value propositions. Less than half (46%) claimed to have a deep understanding of their audience personas, helping marketers identify customer values that lead to compelling value propositions.

The Takeaway

To truly develop the optimal value proposition, marketers need to fully understand their target audience and customer personas. Then, they need to be able to answer the three critical questions (above) surrounding an offering. If the company’s offerings create superior value for the customer, collaborator, and company relative to the competitors and other options, the company must generate to provide the offering — then the company is positioned to achieve market superiority.


Sources:

Adkins, Amy (2016, March 31), Biggest Driver of B2B Success: Meaningful Customer Impact. Retrieved from http://www.gallup.com. Accessed April 7, 2017.

“Definition of Marketing.” American Marketing Association. N.p., July 2013. Web. 8 Apr. 2017. Retrieved from http://www.ama.org. Accessed April 7, 2017.

MarketingCharts staff (2017, March 23). Which Components Are Essential to Marketers’ Brand Strategies? Retrieved from http://www.marketingcharts.com. Accessed April 8, 2017.

Trout, Jack (2006, July 3). Peter Drucker on Marketing. Retrieved from http://www.Forbes.com. Accessed April 9, 2017.

Chernev, A. Strategic Marketing Management. Chicago, IL. Cerrebellum Press; 2014

Effective business writing is essential to a company because it creates efficient communication that leads to:

  • Increased productivity 
  • Faster problem solving 
  • More decisive decision-making
  • Increased profits 

It also helps boost the organization’s credibility.

To some professionals, writing is a daunting task. So much so that they have a fear of penning ink on paper and often miss deadlines or poorly communicating company or marketing information. The writers writing paralysis ends up wasting company resources such as time and money. The truth is, writing, like any other skill, takes practice to master.

Business writing skills are a necessary skill-set for marketers to master. As part of the job, a marketing professional must write advertising copy, press releases, sales copy, internal reports, social media postings, blog posts, and much more content.

The three-step writing process helps business writers, like marketing professionals, create compelling messages in any medium. It allows them to communicate their message effectively while meeting their target audience’s needs. The three-step process also ensures that writers make the best use of their time and the audience’s time. As the writer gets more practice with the three-step writing process, it becomes easier to write. 

Below are the steps to the three-step writing process (For a visual representation, see the Three-Step Writing Process chart below.).

Three-Step Writing Process

  1. Plan
  2. Write
  3. Complete

MB-three-step-writing-process-diagram

Download the above three step writing process pdf cheat sheet for FREE!

Click the link to visit the download page.

Three-Step Writing Process Details

1. Planning

Analyze the Situation
Define the reason or purpose for writing and develop an audience profile.

Gather Information
Determine the needs of the audience and gather information required to satisfy those needs.

Select the Right Delivery Vehicle
Determine the best medium (delivery vehicle) for communicating the message.

Organize the Information
Define the main communication idea and select a direct or an indirect approach. Outline the communication content.

2. Write

Adapt to the Audience

writing pencil sketch

Connect with your audience by being sensitive to their needs and using a “you” attitude. (See explanation of the “you” attitude below.)

Build a strong relationship with the audience by establishing credibility and projecting your company’s brand image. Use a conversational tone, plain English, and an appropriate voice to deliver the message.

Compose the Message
Choose strong words that create useful sentences and coherent paragraphs.

3. Complete

Revise the Message
Evaluate the content and review it for readability. If required, edit the content and rewrite for conciseness and clarity.

Produce the Message
Use useful design elements for a clean and professional layout.

Proofread the Message
Review the communication piece for errors in the layout. Check the spelling and mechanics as well.

Distribute the Message

Deliver the message using the chosen communication vehicle. Make sure that all documents and files relevant to the communication item are successfully distributed.

While the process of writing may seem challenging at first, practicing often and implementing the three-step writing process will help improve writing skills. The more a business professional writes and uses the three-step process, the more automatic their writing becomes.


 

The "You" Attitude

The “you” attitude is an audience-centered approach to communicating that involves understanding and respecting your audience and making every effort to get your message across in a way that is meaningful to them.

The “you” attitude is in contrast to messages that are in stark contrast to messages that are about “me.” The goal is to learn as much as possible about your audience. Learn things such as their biases, education, age, status, style, as well as personal and professional concerns. Using this informant you are able to satisfy their need through communication.