There are three factors which make up the value proposition of your product or Service:

1. Production cost: How much it will cost you to develop and produce the product or service?

2. Customer utility: What amount can you use to represent the degree to which customer will value the product or service?

3. Price: How much will the customer be willing to pay for your product or service?

The lower your production costs and the higher the customer utility, the better the value proposition will be.