When we talk about USP or Unique Selling Proposition, there are certain names we just cannot afford to miss and one such name is Avis. Avis is a car rental company headquartered in New Jersey with global operations. In the early 60s, Avis had only 29% of market share which placed them in the second slot while Hertz was the market leader with 61% market share. Avis desperately wanted to enhance their market share. Avis came out with a powerful positioning statement – “We are number two. We try harder.” something that rang beautifully in the minds of the customers. Even today the brand statement sounds so appealing. By 1966, Avis market share reached 36% while that of Hertz was reduced to 49%. For the first time in more than a decade, Avis registered earnings of $1.2 million from negative. And this turnaround is attributed to the advertising might of USP (and creative thinking too) in the endeavors of business growth and expansion. (1)
Texas-based Saddleback Leather Co. is a leather bag/accessories company that has positioned itself quite uniquely from the rest of its competitors with the positioning statement – “They’ll Fight Over It When You’re Dead.” But it is not just about the USP statement. The brand also exhibits a strong personality which can be clearly felt when one visits the website of the company. Apart from providing a shopping platform for its products, it is as if Saddleback’s founder – Dave Munson is trying to project the essence of Saddleback by presenting a narrative of his personal experiences revolving around the formation and journey of the company in the website. (2)
A strong USP and a brand personality are necessary for a business enterprise to distinguish itself from its competitors and present itself or its products/services as unique in a certain way(s). While the brand is perceptive in nature; USPs can be real, perceptive or both. And as long as this perception is sustained, customers stand convinced and a business continues to deliver what it promises to deliver, customers will stick.
In this article, we’ll try to examine the pitfalls of going for different business growth and expansion strategies without any strong USP.
Market Penetration
Market penetration is a very basic business growth and expansion strategy involving the least amount of risk. It focuses on selling more of the existing products to the existing customers in the same market. Businesses try to achieve this by making changes in the elements of its marketing mix like attractive pricing, promotional efforts etc. Positioning can play a vital role in the success of market penetration strategy. In order to sell more, existing customers have to see a reason (real or perceptive) to buy more. At this juncture, it becomes necessary for businesses to project a USP of the existing products/services or of the company itself in a new and different light which is unique and more appealing to the customers than they have previously experienced. In the aforesaid example of Avis, we have seen how a change in the perceptive positioning can help a business not just survive but also grow in terms of popularity and expand its market share. Without a strong USP, customers will not be convinced to buy more and rather they’ll perceive it as a desperate measure to enhance sales.
It focuses on selling more of the existing products to the existing customers in the same market.
Market Development
In market development strategy, companies target new markets with their existing products/services. Size of the market, target market share, level of competition etc are some of the important considerations in targeting new markets. It is highly likely that the existing players in the new market already know and understand the needs and preferences of the customers and have adjusted their marketing mix accordingly. If the competition is intense and a business enterprise (or its franchisee) fails to come up with a stronger USP and a more attractive marketing mix, it will not be able to attract the customers in the new market. However, it is not always easy for a business enterprise to distinguish itself in a new market especially when the margins are restrictive, costs cannot be reduced, products/services are homogenous etc. But in the aforesaid example of Saddleback, we have seen how perceptive positioning can be used to create a USP by projecting a strong brand personality.
Size of the market, target market share, level of competition etc are some of the important considerations in targeting new markets
Product Development
Fast food companies like McDonald’s, Pizza Hut, Dominos, Burger King etc extensively uses the product development strategy following which they offer new products to their existing customers in the existing markets. What makes this strategy relatively convenient for launching new products/services is that the companies have a prior understanding of the targeted market segment in terms of customer behavior, needs and preferences etc. And on the other hand, the existing customers are also aware of the brands’ USPs, quality of the products and services, prices etc. The same strategy is applied by many small and medium businesses to offer new products to their existing customers. But it does not imply that this strategy can be blindly adopted. Apart from creating and offering good products, it is also necessary for a business enterprise to project a strong USP for those products in the absence of which even a good product might fail to attract customers or make them turn away to competitors.
Fast food companies like McDonald’s, Pizza Hut, Dominos, Burger King etc extensively uses the product development strategy following which they offer new products to their existing customers in the existing markets
Diversification
When a company targets new markets with new products and services, it is referred to as diversification strategy. Usually, companies do not go alone when they diversify. Diversification often takes place in the form of mergers, acquisitions and JVs especially at the global level. When companies diversify in any of these forms, it becomes very important for them to sustain the USPs of the brands involved. For example, when Microsoft acquired Nokia (handset division), it not only marked the entry of Microsoft into a completely new product category and a completely new market segment but Microsoft also inherited the strong brand USPs of Nokia. Whether or not Microsoft has been able to sustain the might of the brand USPs of Nokia is something we would like to leave to our readers and the loyal Nokia customers to decide.
When a company targets new markets with new products and services, it is referred to as diversification strategy
In a crowded and competitive business world, it is very important for businesses to project themselves as unique and distinguished from others. This positioning is crucial to attract customers and outshine competitors especially when a business seeks to explore new markets, launch new products or capture greater market share. In a nutshell, creating, projecting and sustaining strong brand USPs is essential for business growth and expansion.
To read more article related to this topics click here: 5 Things to Check Before Investing in a Franchise Brand | YRC, How Can an SME Raise Funds from Public? | YRC, 05 Reasons why Developing the Right Culture in the Organization is Inevitable for Growth | YRC, How SOPs will Benefit Wholesale Brand Venturing into Retail | YRC.
YRC is an “Expert Service Division” of Mind-A-Mend Consultancy Pvt. Ltd.
Author Bio
Rupal Agarwal
Chief Strategy Officer
