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Study Notes

Product differentiation and USPs

AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

An important part of the marketing of the product is through product differentiation. This means making the product different from its competitors.

Product differentiation can be achieved through:

Distinctive design– e.g. Dyson; Apple iPhone, iPad & iMac

Branding - e.g. Nike, Reebok, Louis Vuitton, Disney, Pampers, Timberland, H&M

Performance - e.g. Mercedes, BMW

A key term to remember is USP, which is the acronym for Unique Selling Point.

A Unique Selling Point (sometimes called a Unique Sales Proposition) is a feature or benefit that separates a product from its competitors. The concept of a USP is one of the basics of effective marketing and business that has stood the test of time.

This could be a lower price, a smaller version of the product, offering extra functions, or even simply producing a standard product in a range of colours or designs.

A business needs to look at its unique selling points compared to competitors. If it doesn't have any, the business will probably struggle to make the product seem attractive to customers (the remaining option is usually to compete solely on price).

If a business finds that its customers are switching to competitors or buying purely on price, it should be asked whether the business has identified the USPs for its products and services. If it has, then the question is whether it is communicating USPs clearly to customers?

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