Entrepreneurs play an important role in creating value for themselves and the public at large; for this reason, societies that encourage such ventures reap improved economic growth and development. In businesses, value is the worth that consumers receive in exchange for paying a set price for goods. Consumers have a better understanding of their needs; however, they lack the knowledge of the best ways of fulfilling such needs and wants (Almquist, Senior & Bloch 2016). Therefore, entrepreneurs have a distinct responsibility in demonstrating the value provided by their products to consumers.
- Identify the importance of value in acquiring a competitive advantage
- Determine the essential steps in product value creation
- What role does product value play in creating a business’s competitive advantage?
- What steps must an entrepreneur follow to create value for a product?
Entrepreneurs should understand the preferences and needs of the target consumers, while products that are not aligned to consumer needs are likely to fail. Despite the importance of invention, innovative products that do not meet consumers’ needs are likely to fail due to lack of consumer appeal. Therefore, entrepreneurs must move to a ‘buyer mind-set’ to create desirable commodities. According to Maskiewicz and Kozar (2011), understanding the nature and preference of customer requires the use of personas to identify ideal customers for new products.
Value is also created by targeting the right market because investment is a risky business that requires adequate research (Bonoma 2006). For unique products, little information exists about consumer attitudes towards such products, which hinders knowledge on consumer preferences. Therefore, an entrepreneur must use informed intuition to identify high-quality examples of using a product. One of the proposals given by Chase and Dasu (2001) is using Big Data to understand customers. However, sufficient relevant data may not be available for new products.
The growth of globalization and continued deregulation of markets make it difficult for entrepreneurs to differentiate their products. Additionally, distinctions among the products are minimal as most of them attempt to replicate the successful pioneers in the market. Instead, entrepreneurs must seek to differentiate their products to improve consumers’ preferences. Therefore, they must understand the consumption chain and map the consumption chain at every essential segment as suggested by Prahald and Ramswamy, (2004). There are multiple differentiation opportunities at the point of product or service delivery; however, a prescribed way explaining how entrepreneurs should identify these differentiation points and exploit them for organization success does not exist in literature.
Value does not benefit an organization unless it is recognized by consumers; for this reason, products have symbolic meanings, which create self-identity among consumers (Kormakar, 2014). Companies create symbolism by establishing a brand for their product and their company, which becomes a symbol and point of reference for consumers (Brunner, et al. 2016). The literature reviewed identifies the essential steps in creating value for new products, and identifies the role played by entrepreneurs. A major weakness of the existing literature is identifying how social media has changed the concept of branding and value creation. Through the research, there are gaps in identifying the changes creators must address due to technology advancement. The study will also address gaps in describing the new ideal customer for innovative products.
The research will use a qualitative design to address the topic identified. Since the problem is explorative with the aim of learning about entrepreneurial process, the qualitative methodology is the most appropriate one. Qualitative research design allows the researcher to identify how people make sense of things in the world, therefore, it is a collective term that identifies techniques that seek to describe and translate a phenomenon (Rahman 2017).
The research will use semi-structured interviews to identify the importance of value creation and the ways entrepreneurs apply the concept in their businesses. The method is chosen for its ability to explore an idea to identify areas not mapped by the researcher (Qu & Dumay 2011). Twelve interviews will be conducted among identified consumers, while sampling will be used to select the candidates for quality information.
The first chapter of the research will be ready in three weeks after approval of the research proposal, while the second chapter will follow in four weeks. Within two months of providing the literature review, the methodology will be ready together with the draft semi-structured interview questions. After approval of the method, data collection will be done in a month and the rest of the sections completed within two months, and the entire research will take six months.
Almquist, E, Senior, J & Bloch, N 2016, ‘The elements of value’, Harvard Business Review, vol. 94, no.9, pp. 46-92.
Bonoma, TV 2006, ‘Major sales: Who really does the buying?’ Harvard Business Review, vol. 84, no.7/8, pp.172-181
Brunner, C B, Ullrich, S, Jungen, P, & Esch, F 2016, ‘Impact of symbolic product design on brand evaluations’, Journal of Product & Brand Management, vol. 25, no.3, pp.307-320. doi:10.1108/JPBM0620150896
Chase, R B. & Dasu, S 2001, ‘Want to perfect your company’s service? Use behavioral science’, Harvard Business Review, vol. 79, no.6, pp.78-84.
Kormakar, PP 2014, ‘All about brands and brand building’, International Journal of Innovation and Scientific Research, vol. 3,no. 1, pp. 54-61.
Maskiewicz, T, & Kozar, KA 2011, ‘Personas and user-centered design: how can personas benefit product design processes?’ Elsevier, vol. 32, no. 5, pp.417-430. doi: 10.1016/j.destud.2011.03.003
Prahald, CK & Ramswamy, V 2004, ‘Co-creation experiences: The next practice in value creation’, Journal of Interactive Marketing, vol.18, no.3, pp.5-14. doi: 10.1002/dir.20015
Qu, S, & Dumay, J 2011, ‘The qualitative research interview’, Qualitative Research in Accounting and Management, vol. 8, no.3, pp. 238-264. doi: 10.1108/11766091111162070.
Rahman, S 2017, ‘The advantages and disadvantages of using qualitative and quantitative approaches and methods in language ‘testing and assessment’ research: A literature review’, Journal of Education and Learning, vol.6, no.1, pp. 102-112. doi: 10.5539/jel.v6n1p102