Strategies of Value Proposition on the Internet

Abstract

Paper presents strategies of value proposition on the Internet. Author has distinguished and described strategies of efficiency, free values, complete customer solutions, unique values and value co-creation. These strategies are different from traditional strategies of value proposition, which refer values for customers to the level of price.

Efficiency strategy consists in offering values to customers, which are to lower their transactional, interaction and other costs and in this way allow savings of time and money. Free value strategy is based on offering values to customers, for which they are not charged. Strategy of free values can be a part of a broader business strategy assuming the revenue generation. This can be performed twofold: revenues can be generated by another group of customers or the company can charge customers for premium values (freemium). Strategy of complete customer solutions relies on offering a broad scope of values from certain categories.The next of formulated is the strategy of unique values. A company follows this strategy, if it offers scarce values on the market. This situation is very attractive, as it allows charging high prices and thus taking advantage of high margin. The strategy of value co-creation assumes that customers actively participate in shaping the value proposition, which will be delivered to themselves or to other customers. According to Prahalad and Ramaswany, this is the value co-creation with customers that is the essence of competition in modern economy [2004]. The scope of the strategy is broad. It includes the situation, in which a customer co-creates composition of values with a company for himself. The customers may also create values orientated not at themselves, but at other customers.

Keywords: Value Proposition, Values for Customer, Internet, E-commerce, Online, Marketing, Customer, Strategy, Value Offerings, Value co-creation, Mass Customization, Freemium

JEL Classification: M31, M39