Value proposition is a promise of value to be delivered and acknowledged and a belief from the customer that value

Step 3: Know your competitors
Keep on thinking from the perspective of your customer, and ask:
How does your product or idea create more value than competing ones?
Tip: This can be quite difficult. See our articles on USP Analysis , Core Competence Analysis and SWOT Analysis for useful tools for doing this.
Step 4: Distill the customer-oriented proposition
The final step is to pull it all together and answer, in 2 or 3 sentence: "Why should I buy this specific product or idea?"
Try writing from the customer viewpoint by completing the following, (also include the numbers and percentages that matter!):
"I want to buy this product or idea because it will..."
"The things I value most about the offer are..."
"It is better than competing products or ideas because..."
Step 5: Pull it all together
Now, turn around your customers 'answer' from step 4 into a value proposition statement.
Creating a Value Proposition
Communicating the Benefits of Your Product, Service or Idea, Simply and Clearly (Continued)
http://www.mindtools.com/CommSkll/ValueProposition.htm
Example
Here's a simple example. Let's say that you sell lawn mowers, and your customer is someone with a large back yard.
Step 1: Know your customer
Your customer is a businessman with quite a large house, who likes the "meditative feeling" of cutting his own lawn, but gets bored by the job when it takes too long.
He's looking for a good quality of cut, for the job to be done quickly and enjoyably.
Step 2: Know your product or idea
The product is a ride-on mower with a 25 horsepower (powerful) engine and 45 inch (wide) cutting blades.
Step 3: Know your competitors
The mower goes faster and cuts wider than the competition.
Step 4: Distill the customer-oriented proposition
"Our mower cuts your grass in 50% of the time of 'big brand' mowers in its class. And it leaves the lawn looking beautiful too!"
If you haven't already looked at our USP Analysis article, do so now – it will show you how, with a little research, you can identify how your product or service is unique. It's also worth understanding the various strategic positioning options that will underpin your value statement: our article on Porter's Generic Strategies explains these.
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