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Unique Selling Proposition (USP) - Meaning, Importance, Factors & Example

Published by MBA Skool Team in Marketing and Strategy Terms Last Updated: December 29, 2023Read time:

What is Unique Selling Proposition (USP)?

Unique Selling Proposition or USP is a factor that makes a company gain a unique market positioning with respect to the number of other competitors. USP often makes a non-user try and converts a user into loyal customer. It is that one factor that your company has and the others in the market don’t. USP is also referred to as Unique Selling Point.

A unique selling proposition can be product quality, product features, service delivery, lower price etc. i.e. anything beneficial for a customer, which is not offered by any competition.

A USP could be in terms of superior product quality, low cost, process of service delivery, the first ever product of its kind etc. In order to come up with a USP a company often needs to put itself in the shoe of the customer and see what motivates the buying behavior of the customer and why they choose to buy your product over the competitors.

The proposition results in differentiation of the product that creates a competitive advantage for the product in the market. The unique criteria of USP are as follows

1. The proposition must be unique and must be one that cannot be easily replicated by competitors
2. The proposition must be strong to influence the consumers to switch brands
3. The advertisements of the product must be compelling enough and clearly translate the benefit

Importance of USP

USP is one of the most important aspects in modern day marketing where there are so many products and competitors. Every brand is offering the core features and the products are improving year on year. Every company needs to differentiate and offer core points in every product which can make it stand apart from the competition and also make it viable for the customer. If a customers are presented with multiple similar products, which one would they chose would depend on unique points of the product. It may be quality, low price, or after sales service. A point which can help customer make the purchasing decision.

Every product and company needs to have a USP before the market launch. If a brand does not have a unique and identifiable differentiator, it may not become part of the consideration set of the customer.

USP also acts as the point which can enable the sales team to start selling and promoting the product in the market.

Factors which decide the USP

The USP of a product must be:

1. Easy to Understand

The USP given by a company should be easy to understand for the customer. Many a times, USP can become technical but the customer might not understand or worry too much about it. Even thought the product is good, customer might not be able to perceive the value through USP hence it should be easy and straightforward.

2. Evident

The USP should be clear and evident. If a manufacturer claims something as USP in the product, the customer should be able to validate it immediately on seeing the product or through the first purchase.

3. Be Unique

As the name implies, it should actually be unique from the competition and not same or similar to some other competitor. It will not help customer identify the uniqueness and may prefer customer's product.

4. Not Temporary

The USP should be not a temporary discount or an offer. A USP should be well defined and be for long term or at least it should have a lifecycle which can support a version or iteration of the product in the market

5. Value Driven

The USP needs to be value driven. It should be able to help the customer see the value it is trying to provide. The customer may value quality, convenience etc. The value should be clear through the USP.

Example of USP

1.Southwest airline claims itself to be the lowest priced airline, in this case its cheapest fares is its USP.
2.Dominos has its USP as its 30 minutes delivery policy.
3.Apple is perceived as high quality product manufacturer. The Quality acts as its USP hence enabling the company to charge a premium price for its products.

Hence, this concludes the definition of Unique Selling Proposition (USP) along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.

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