Home > Articles > Business & Management

  • Print
  • + Share This
This chapter is from the book

Tying Together the Value Proposition: Distinctive Competence, Sustainable Competitive Advantage, and Positioning

Now that we have explored segmentation and differentiation and established their relationship to the strategic concepts of distinctive competence and sustainable competitive advantage, we can return to the unique value proposition. The unique value proposition is the public face that is put on the target market and positioning decisions that were based on the venture’s distinctive competence and sustainable competitive advantage. We can now determine the answer to “What am I selling to whom and why will they buy” based on the decisions discussed previously. Be careful, however—these decisions are not easily changed. It typically takes more effort to change a value proposition than to attempt to establish a new one in a vacuum. To change a value proposition is more than changing a slogan. It means undoing a market perception that has been established based on how a venture executes and replacing it with another.

For entrepreneurial companies, deciding on the value proposition—the intertwined positioning, distinctive competence, and sustained competitive advantage decisions—is the most important strategic decision made before beginning a new business or revitalizing an older business. Take the time to do it right. If the market doesn’t value what they perceive to be the distinctive competence of your firm versus the competition (another way of defining differentiation), then the positioning will not be successful. If the positioning is not successful, the value proposition will fail to attract customers. Furthermore, because it is difficult to change perception, the perceived distinctive competence should be sustainable over time. Thus, it is crucial to get the positioning reasonably close to right before going public the first time. Figure 1-2 shows the logic of our recommended decision-making process of getting the strategy right before the tactics.

Figure 1-2

Figure 1-2 Market-driven strategy

By now, this logic should be clear to you. The venture must first assess and creatively identify potential and existing competencies that can be possible sources for sustainable competitive advantage. This assessment needs to be integrated with how the market might perceive the product offerings that may result from the competencies versus how the potential customers might perceive the competition. This assessment needs to be continually re-evaluated as competition and perceptions and consumer needs and wants will change over time. Only after the positioning and the value proposition have been determined, should the tactical marketing elements in the bottom of the figure be decided and executed. Pricing is the only marketing mix decision that should ideally be determined at the same time as the positioning and value proposition. We show in Chapter 3, “Entrepreneurial Pricing: An Often Misused Way to Garner Extraordinary Profits,” that pricing is intimately related to and leveraged by the positioning decisions. Customers are willing to pay more for product/service offerings that are perceived as adding more value than the competition’s.

In Chapters 2 and 3, we also explore cost-effective ways of getting market reaction to positioning options before spending a lot of resources.

Victoria’s Secret and L Brands—Excellent Integration of Positioning, Segmentation, and Distinctive Competencies7

The original Victoria’s Secret store and catalog was in Palo Alto, California. In 1982, when L Brands (formerly Limited Brands) founder, Les Wexner, first saw this store, it was very sleazy stuff. However, after seeing the store, Les got the idea to reinvent underwear as lingerie and make underwear emotional—have underwear make you feel good. Les was influenced by how he thought European women viewed underwear much differently than American women. A brilliant idea early on was to use supermodels as part of the public relations (PR) and advertising for Victoria’s Secret (VS).

L Brands bought the first VS store for $1 million in 1982. By 1995, they had a catalog, 300 retail stores, and an $800 million business. The catalog was the greatest revenue contributor. In 1995, VS products were perceived by women and men as suited mainly for Saturday night and special occasions. In 1995, VS marketers identified an opportunity for a much-expanded positioning for VS—addressing “everyday” needs while maintaining the “special” image. They began the transformation of VS by segmenting by usage occasion. Their first products in the repositioned lines were everyday cotton, but positioned and designed as “sexy.” There was a lot of uncertainty in L Brands management about whether it was possible to have women perceive cotton as lingerie. The risk was that cotton underwear might be perceived as comparable to Hanes as opposed to being perceived as sexy lingerie. This was a big communication challenge.

All the elements of the marketing mix needed to be changed to support the new positioning. VS had never advertised before and had only used their catalog as an advertising vehicle. The catalog was low in reach and high in frequency—not suited for getting new people into the brand on a large scale or for changing the perception of the product. Thus, large-scale TV advertising and PR were appropriate, using their successful supermodel icons as part of the repositioning. The supermodels were the embodiment of the emotion of the new VS positioning. The VS supermodel fashion shows on the Internet were extremely effective at reinforcing their positioning. So many people came to their website that they overwhelmed the Internet servers.

In 1995, before the repositioning, VS bras were priced two for $15, and VS was a merchant-driven business. It needed to be made into a fashion business. By 2006, the average price for a VS item had more than doubled, and their revenue had risen by a factor of over four due to the repositioning. One key to the success of the repositioning was that the VS bras were not only sexy, but they were extremely comfortable. The consumer didn’t have to compromise between feeling sexy and feeling comfortable. The loyalty levels for VS doubled with the new bras. Increasing loyalty makes the long-term value of a customer larger, thus justifying larger expenses for obtaining new customers—a nice virtuous circle for VS.

The VS stores were an integral element of the repositioning. The in-store experience is designed to be much different from other stores—it is designed to make customers feel special, intimate, and personal. There is much more pampering.

VS has evolved subbrands over time, segmented by lifestyle:

  • Provocative—“Very Sexy”
  • Romantic—“Angels”
  • Girly—“Such a Flirt”
  • Clean and simple—“Body by Victoria”
  • Younger-flirty-modern—“Pink”

VS has succeeded in doing what Starbucks has also done—changing how people view a commodity—by changing VS into a relatively inexpensive way for women to feel good about themselves. Chapters 2, 3, 6, and 7 go into more depth as to how VS and L Brands were able to use entrepreneurial marketing strategy and tactics to accomplish making VS the crown jewel of L Brands.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020