The most important aspect of marketing is to create Unique Selling Point (USP) for the product to differentiate from competitors.
Unique Selling Point (USP), or unique selling proposition, is an aspect of a business, product or brand that makes it stand out competition. It is usually the special feature of a product that differentiates it from competitors’ products.
In reality, Unique Selling Point (USP) can be a major source of competitive advantage as it helps to attract customers.
Additionally, Unique Selling Point (USP) helps to explain why customers buy the product over products from rival businesses.
Product differentiation creates a Unique Selling Point (USP)
Product differentiation can be an effective way of distancing a business from its rivals.
One of the main aims of any firm is to mark themselves out from other firms and ensure that their product is, or appears to be, different or even unique. This is termed product differentiation and it is something all companies are striving for. Product differentiation is the basis of Unique Selling Point (USP).
That is why the best form of product differentiation is one that creates Unique Selling Point (USP). Developing Unique Selling Point (USP) can be a very expensive but rewarding strategy.
The most successful new products are those that are differentiated from competitors’ products because they offer something ‘special’.
Unique Selling Point (USP) usually revolves around innovation and promotion.
- Innovation. Achieved by technical innovation that is patented, e.g. computer software, new medication, engineering solutions, etc.
- Promotion. Achieved by heavy and effective promotion, e.g. Coca-Cola’s commercials on television, sponsorship of soccer clubs by airline companies, ads of luxury cosmetics in glossy magazines, participation in trade shows by car companies, etc.
Businesses want to emphasize their Unique Selling Point (USP) and it by including it in their marketing strategies.
Example 1: Unique Selling Point (USP) of iPhone The news pages have been buzzing with talk of the iPhone, Apple’s new entry into the highly competitive mobile phone market. However is the iPhone going to prove as successful as the iPod? To succeed in this market, the iPhone needs to have a clear Unique Selling Point (USP). Before the product has been fully launched, Apple is already trying to create the impression of something very new. 'We’ve been lucky at Apple to have had some really revolutionary products,' said Steve Jobs of Apple, 'and we’re going to do it again with the iPhone in 2007' (The Sunday Times, Sunday 14th Jan 2007). So what is so revolutionary? Perhaps it is the combined power of the mobile phone, an iPod music player and a device for accessing the internet? Whilst news of the phone lifted Apple’s share price to an all time high, not all news stories are hailing the launch. 'From iPhone to iGroan' is the headline from the BBC, which questions whether the product is all that unique, whilst also questioning whether consumers can really cope with the increased functionality that many mobiles now offer (BBC, Friday 12th Jan 2007). Perhaps the Unique Selling Point (USP) of the iPhone is less about the product’s technology, and more about branding and image?
Unique Selling Point (USP) does not have to relate to the product itself.
Example 2: Unique Selling Point (USP) at Vodaphone Vodafone builds Unique Selling Point (USP) in part through its careful sponsorship deals. Vodafone's link with Ferrari gives them the Unique Selling Point (USP) in terms of up-to-the-minute involvement with the world's leading racing team.
Common examples of a Unique Selling Point (USP)
What can a firm do to increase its appeal and uniqueness? Generic examples of Unique Selling Point (USP) include:
- Being the supplier of a certain product. E.g. State Grid in China supplying electricity.
- Being the first business to provide a certain product. E.g. SONY’s Play Station.
- Offering a unique service that no one else does. E.g. Domino’s Pizza deliveries ‘It arrives in 30 minutes or it’s free.’
- Having distinctive features of the product. E.g. Dyson vacuum cleaners not using fans working without bags.
- Designing appealing packaging. E.g. Burger King wrappers.
- Having the highest durability. E.g. Nokia phones.
- Having reputation for being the best in the market, e.g. Apple’s smartphones.
- Offering the lowest prices. E.g. Walmart’s ‘Always Low Prices’.
- Having a popular slogan. E.g. Nike’s ‘Just Do It’.
Evaluation of a Unique Selling Point (USP)
Advantages of having Unique Selling Point (USP) include:
- Price advantages. By offering a product with the unique feature of function, the business adds value, therefore it can charge higher prices. Differentiation tends to add value in general. Firms that sell standardized products can only charge relatively low prices because customers have other substitute suppliers to buy from.
- Brand recognition and loyalty. Customers will always buy a familiar product over an unknown one. High brand recognition can give the firm competitive advantage as customers will feel more comfortable buying from the business that they know.
- Distribution advantages. When warehouse spare or shop space is limited, intermediaries such as wholesalers and retailers only want to stock up the best-selling products from strong brands. Having a unique selling point will help with being included in various distribution channels.
Disadvantages of having Unique Selling Point (USP) include:
- Costly. It is very expensive and time consuming for a business to differentiate products and services, especially, when the firm is targeting a large number of customers in different market segments. Hence, only large businesses will have the financial resources to come up with product ideas that are truly unique. Otherwise, differentiation will only drain resources of small firms.
- Lack economies of scale. Only when mass producing a single standardized product, the business can benefit from economies of scale to lower the average cost of production. Differentiation on another hand requires additional production and marketing costs when the business caters for different customers in different markets with different products.
- Excessive differentiation. Too much differentiation of every product in the firm’s portfolio will mean that all products are unique and none of them is at the same time. This will only confuse customers instead of helping the business to stand on the marketplace.
Example 1: Many telecommunication providers, banks and insurance companies offer an excessive number of pricing packages while most of the customers will only choose just one or two.
Although having Unique Selling Point (USP) can be advantageous for the business, brand and the product, it can be extremely difficult to find. In reality, once a business establishes successful Unique Selling Point (USP) in a market, other businesses enter the market quickly to compete by selling similar products.
