Unit 5: Product Propositions

Lesson 1: Unique Selling Proposition

Unique Selling Proposition- Unique selling proposition (USP), also known as unique selling
points, is a marketing strategy that focuses on special features of a product or services
which enable them to stand out from the competition and attract customers. These features
might include the quality of design, style or service, and cost or the reliability of the
product. It could be described as what you have and what your competitors don’t have.
Example: Below are the well-known unique selling propositions of some businesses.

Business/Product USP
Starbucks Coffee Premium Coffee
Domino’s Pizza You get fresh, hot pizza delivered to your door in
30 minutes or less or it’s free.
M&Ms The milk chocolate melts in your mouth, not in
your hand.

REMEMBER A unique selling proposition is a statement created by entrepreneurs to

highlight distinct characteristics of products or services from competitors.

Purpose of the Unique Selling Proposition

A clearly stated unique selling proposition can be an effective tool to focus on goals in
business. The following are the general purposes of having a unique selling proposition.
1. Sympathize with customer needs - Some entrepreneurs focus only on their product
or services, and they tend to forget customer needs considering they must be
satisfied. Since customers are the source of sales and income, entrepreneurs should
prioritize their needs. In creating unique selling propositions, they put themselves in
customer’s shoes so that they understand what the customers really need.
2. Motivate the customer - Entrepreneurs must know what motivates and drives the
customer to buy the product. If businesses use a unique selling proposition,
entrepreneurs identify what will motivate them to purchase the product.
3. Uncover the real reason why the customer buys the product - As the business
grows, the best source of information is the customers. Entrepreneurs may ask
customers why they are patronizing the product. For example, the entrepreneur who
sells pizza may ask what features of the product he offers they would like the most
such as taste, size or ingredients. Then, answers to these can be a good source of the
business’ unique selling proposition.

TIP The unique selling proposition describes only the features of the product or
service that are different from others.

Advantages of the Unique Selling Proposition

Businesses use a unique selling proposition for the advantage of their organization. It
helps to attain the company’s goals. Some of these advantages are the following:

Advantages Description
Clear Differentiation Using a unique selling proposition will
provide your customers with a clear
differentiation of your product from
competitors. Differentiation is the unique
product attribute that separates the
business from other businesses with the
same nature.
Improved Revenue The revenue improves or exceeds
expectations if the business offers a
product with the use of a unique selling
 proposition. People will buy the product or
services because it matches their needs.
Loyal Customers When the business provides a product
that meets customer needs through a
unique selling proposition, the buyers are
likely to return for a future need.
Customers tend to repeat the purchase.
The repeat purchases evolve into feelings
of loyalty to the business.
Simpler Selling Sales staff benefits when companies
develop and use an effective unique
selling proposition. It gives the sales
representatives the opportunity to discuss
the value and benefits of the product to
the customers more easily and
convincingly.
Sales Strategy A good unique selling proposition allows
the business to communicate to its target
market. It will serve as a strategy to boost
the sales of the company.

Steps in Writing Unique Selling Proposition

An entrepreneur should not proceed to the creation of a unique selling proposition
without planning it. In planning, a few steps that may serve as a guide can be followed and
considered:

Steps in Writing Unique Selling Proposition

The entrepreneur must review the

Step 1. Review the planning whole planning process. It includes
process. the mission statement, business
plan, and business goals.

Step 2. Identify the target The entrepreneur must identify the

audience’s problem. target market’s problem and
explain how the product or service
solves the problem.

Focus on finding a solution to the

Step 3. Focus on the customer’s problem. It should be
solution. better than the competitor’s
solution offering.

Combine the important elements

Step 4. Combine it into a of the previous step into a clear,
concise statement. concise, and unique statement.
 Lesson 2: Value Proposition
Value describes the importance or usefulness of something to consumers. Value is the
core of any business organization, and it directs all future decisions, innovations, and
target customers. Engage yourself in the lesson and learn how to make a value
proposition for your business.
Value Proposition - is a business or marketing statement indicating the worth that the
business offers to customers. The business makes promises to a customer or consumer
segment, which is easy to understand why they should purchase a product or service. It
can be applied to the whole organization, customer accounts, products, or services.
Business Product Value Proposition
Walmart Products offered virtually Save money, Live better
Spotify Online music streaming Soundtrack your life
Vimeo Online video streaming Makes life worth watching
Example: Below are the well-known value propositions of some businesses.

REMEMBER A value proposition is a statement that clearly identifies the benefits and
the reason why a customer should purchase a product or service to the business.

Value Proposition Builder Model

The value proposition builder model is a six-step interactive process in building value or
worth to the customer experience. The steps in value proposition builder model are the
following:

Steps Description
1. Market This includes analyzing and identifying the
market or specific clients or target groups of
the business.
2. Value experience Analyzes the value experience that the
customer may get from the business and its
activities. The entrepreneurs must know how
to define good, bad, and neutral undertakings
because the effectiveness of the value
proposition depends on customer feedback.
3. Offerings Identify the product or service mix the
business is selling and its capabilities of
leveraging the value experience of the
customers.
4. Benefits Assess the benefits of the offerings and how
these offerings deliver clear customer value.
5. Alternative and differentiation Identify the alternative option for the
business’ product and how it is different and
better than alternatives.
6. Proof Provide and ensure with relevant credibility
and believability of your product in order for
the customer to see if the product is really
satisfying.

The Value Life Cycle

The value proposition must be studied throughout the entire life cycle of value perceived by
customers. An entrepreneur must create an attribute that captures the five stages of the
value life cycle. Value elements can be created in each stage of the cycle. The following are
the stages in the value cycle:

Stages Description
1. Value Creation Value creation is a set of interdependent
 activities that generates value for customers
to help sell their products and services. It
includes three main components, such as
key partners, key activities, and key
resources. Marketing and research and
development team are the department in the
business which is responsible for adding
value at this stage.
2. Value Appropriation The value can be created by enhancing,
innovating, and facilitating customer buying
experience. This can be done in two steps.
The first is to improve how transactions are
made. The second is to consider the
satisfaction of the customers.
3. Value Consumption At this stage, customers see and feel the
value of the product by using it. The value is
maximized if the value proposition offered by
the business matches the customer’s needs.
4. Value Renewal This stage happens when value expires.
Value renewal also includes updating and
adding benefits and features to the product
or service.
5. Value Transfer This is the final stage of the value life cycle.
This happens when customers can no longer
gain value from the product or service.

Value Proposition Advantages

The following are the advantages of identifying the value proposition of a business or
product/service.
1. Gives direction. It provides a clear direction by identifying the target market and
understanding the needs of the customers that can be satisfied by a planned solution.
2. Creates focus. The value proposition focuses on how and why the business will deliver
value. It also outlines what the business must deliver to meet the customer’s needs and
create an overall marketable experience.
3. Breeds confidence. It gives the entrepreneur confidence that comes from knowing that
the business is making a difference to the people they serve in a way meaningful to them.
4. Customer understanding and engagement. It serves as a basis to engage the
customers by understanding how the customer views the business and its products or
services.
5. Focus on clarity of value. It focuses on brand awareness. The business is going to
identify a very clear picture of the business’s brand.