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Defining a USP
Defining a USP
Businesses operate in competition with each other. If the market is large enough to support many firms, a new business can open which imitates an existing idea. ‘Me too’ products can sometimes be successful.
However, businesses become more competitive by making products that stand out from the competition in terms of price, quality or service. This is called product differentiation.
Methods of creating product differentiation include:
- Establishing a strong brand image (personality) for a good or service.
- Making the unique selling point of a good or service clear. For example, opening a chain of discount shops with the tagline Quality items under a pound.
- Other competitive factors, such as a product having a better location, design, appearance or price than rivals.
- Customer service: retailers that provide a helpful and friendly service will win customer loyalty.
Companies create logos as part of their brand identity to help differentiate their goods and services
We strongly encourage all MyBnk enterprise groups to devise a USP for their product or service. A USP is how their product or service is better or different to similar products.
EXAMPLES- existing USPs of various products and services
M&M’s chocolate - 'melts in your mouth, not in your hand'
Domino’s Pizza - 'fresh, hot pizza delivered to your door in 30 minutes or less'
EXAMPLE- Good collection of big brand USPs
We want young people to consider how their business will stand apart from the crowd. A USP is an advantage in business because it helps attract customers’ attention and encourages them to buy the product or service.
Some thinkers have even suggested that a USP can mean the difference between success and failure.
This may be an extreme view but we think that it is crucial that all MyBnk enterprise teams can answer the customer question, “Why should I buy from you?”
Teams should be encouraged to be different. In all MyBnk programmes, they will need to stand out from their competitors - other teams of young people as well as established retailers.
EXAMPLE- Spanx billionaire on importance of having a USP and clear idea.
How can young people come up with a USP?
Some teams will immediately know how their business is special or different but other teams may need more support.
The following are suggestions on how you can help teams to define their USP
1. Use personality
Sometimes personality alone can be a powerful difference.
EXAMPLE- Jay Z’s insistence that he’s “not a businessman, he’s a business, man,” businesses (especially small businesses) should realise that a strong personality can go a long way—as long as it aligns with what is being sold.
EXAMPLE- Dr Dre and Beatz headphones (Dr. Dre starts talking at 2.22 mins)
2. Merge existing ideas
USP can be created when existing ideas are combined in new or different ways. Young people can think about their business and what they could add to the mix to make it more interesting and unique.
EXAMPLE- Groupon is a mix of collective buying power and the social web.
EXAMPLE- Year 7 Back My Business group who combined selling headphones and lemonade to create, ‘Refresh and Relax’
3. Narrow the target audience
In some cases, teams could focus on a target audience who has never had a business to cater to them before. This involves offering a very specialist service and teams would need to know about a target audience in a lot of detail.
EXAMPLE- In one school, year 8’s needed to have pens or they got a detention and there was a craze for patball. A team could have the USP build around selling pen and tennis ball packages to year 8’s.
4. Narrow the idea
Lots of teams want to make cupcakes and it can be difficult for them to work out a USP. However, narrowing the type or kind of cupcakes that they make can lead to an interesting USP.
EXAMPLE- A Back My Business team who decided to make Oreo and Malteaser cupcakes as they were the favourite flavours of their target market.
EXAMPLE- Voodoo doughnuts (a shop in America) have a diverse, unusual menu of flavours- they even tried Pepto-Bismol. This menu (helped by the décor and branding) gives them a distinctive USP.
5. Think like a customer
Teams can think in detail about exactly what customers want and/or need from their product or service.
- What does your perfect customer really want?
- How can your product or service solve their problem(s)?
- What factors motivate their buying decisions?
- Why do your existing customers choose your business over your competitors?
EXAMPLE- One famous retail chain has adopted this practice in an extreme fashion. Abercrombie & Fitch’s CEO Mike Jeffries identifies their ideal customers as “cool, good-looking people”.
6. The Crossroads USP
This can be tricky to pull off but can lead to a very powerful USP if used effectively. It involves taking two seemingly unrelated ideas and bringing them together.
EXAMPLE- The hit movie Speed was famously pitched as “Die Hard on a bus.” Clueless is Jane Austen’s Emma set in 1995 Beverly Hills
7.The Metaphor USP
Sometimes teams can find an overarching metaphor that will snap everything into place.
EXAMPLE- Duct Tape Marketing offers something you can find in lots of places—marketing advice for small businesses. But that “duct tape” metaphor tells you a lot. It tells you the approach is practical and effective, and down to earth. In a similar way to duct tape, it offers marketing in lots of different ways.
8. Make a promise
EXAMPLE- Teams can think about the promise that they could make to each customer with their product or service.
EXAMPLE- UPS delivery service, ‘Consider it Done’
EXAMPLE- TOMS- A social enterprise that uses their mission and an ethical promise as an unusual USP
SWOT Analysis
SWOT Analysis
We encourage teams to use a SWOT analysis to consider the potential of their product/service. It can help them to analyse the risk of their idea so they can think about how to move forward with the best plan of action.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
- A strength is a factor which a business currently possesses and which it performs effectively. In MyBnk programmes, this will probably be a strong team or particular skills e.g. number skills.
- A weakness is an area in which the business currently performs poorly. In MyBnk programmes, this may be a tendency for the team to get distracted, friction between certain team members or lack of experience in making the product.
- An opportunity is a potentially successful or profitable activity that the business could take advantage of in the future. In MyBnk programmes, this may be using profit to buy new or different products or selling at another marketplace.
- A threat represents a potential future problem which the business may face in the future. In MyBnk programmes, this could be new teams joining the process or new rules being introduced by the host organisation.
Remember, the strengths and weaknesses are internal factors which the company currently faces. The opportunities and threats are external factors which the company may face in the future.
The S.W.O.T. analysis is represented in a simple four-box diagram, as illustrated below:
Risk assessment
Risk assessment
Every business faces challenges and a certain degree of risk at any stage of growth.
Some risks are manageable and easily sorted, while others can spiral out of control and pose an incredible risk to the survival of a business.
We want to make sure young people realise that it’s important to assess the risks of their enterprises and create a plan to overcome them.
We set young people in low-risk enterprise environments with interest-free loans and no penalties for non-repayment but they should still think about what may go wrong.
A SWOT analysis can help with this but teams should also think about:
In order to identify any potential risks, teams can ask themselves these 3 simple questions:
What could go wrong?
Identifying the risks and challenges
What can you do to prevent it from happening?
Prevention plan/strategy
What actions do you take if it happens?
The answers to all of these questions should be shared with everyone in the team. Every team member should know what to do if something goes wrong.
Product Life-cycle
Higher ability groups may want to consider the product life-cycle. This shows the various stages that a product is expected to pass through and it also indicates the likely level of sales that can be expected at each stage.
The length of the lifecycle will vary from product to product and from industry to industry (e.g. Oxo Cubes, Levi Jeans and Kellogg's Cornflakes have lifecycles that have lasted for over 50 years, but various pop groups and childrens' toys have a lifecycle that can last less than 12 months). Generally, there are six stages to the lifecycle - development, introduction, growth, maturity, saturation and decline, as illustrated on the diagram below :
MyBnk offers high-impact, short-term enterprise programmes but all products are developed and introduced. The product life-cycle helps to show that most products have low sales and high costs when they start out as businesses have to invest in stock and advertising.
Some teams will reach the growth stage of the lifecycle where their product starts to become profitable but the competition may start copying their tactics. Some teams may reach maturity stage where they have a steady profit but every product will eventually reach saturation and start to decline in sales. Teams then have to decide whether to keep their product and make a change e.g. new market or uses or launch another product.
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