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Introduction
[20] Drucker (1999) claims that a serious cost disadvantage may destroy a business and that business success is based on the creation of value and wealth. The common definition of value relies on the price-quality ratio of a product or the difference between perceived benefits and perceived costs. It is a description of a customer's problem, the solution to it and value from the customer's perspective ([14] Chesbrough and Rosenbloom, 2002). A value proposition describes how a company's offer differs from those of its competitors and explains why customers buy from the company.
Perceived value comprises two complementary concepts, i.e. perceived benefit and perceived costs. Perceived benefit is frequently equated with the characteristics and functionalities of products and their quality ([1] Afuah and Tucci, 2000; [30] Kambil et al. , 1996). As the literature suggests, a company can differentiate its products in various ways ([1] Afuah and Tucci, 2000; [13] Caruana et al. , 2000; [30] Kambil et al. , 1996; [62] Trkman, 2010): product features, design, timing, location, service and support, product mix, linkage between functions, linkage with other companies, reputation and a combination of these. But customers do not buy a product's characteristics; rather, they buy the benefits a product provides. During the decision-making process they compare the characteristics of a product with those of competing products. This literature mainly deals with characteristics from an objective quality standpoint (e.g. the company's viewpoint). As it is buyers who ultimately decide on the purchase, the shift to their viewpoint is crucial. During their decision-making, customers ultimately take decisions based on the benefits a product offers, not its characteristics or features per se .
At the same time, the business literature offers many empirical examples but lacks universal models enabling a systematic approach to innovation. [33] Kim and Mauborgne (2005) offer a strategy canvas - a tool for value proposition innovation. Yet the business literature does not systematically decompose value as a concept and this therefore hinders the formulation of an innovative value proposition.
During a value proposition assessment customers also evaluate the perceived costs. These are a combination of nominal prices and other costs related to product acquisition, use and disposal ([58] Slater and Narver, 2000; [68] Weiss et al. , 2003; [70]...