Page 31 - (DK) The Business Book

START SMALL, THINK BIG 29

See also: Finding a profitable niche 22–23 ■ Gaining an edge 32–39 ■ Reinventing and adapting 52–57 ■ Porter’s generic
strategies 178–83 ■ Good and bad strategy 184–85 ■ The value chain 216–17

To achieve success, ...which requires
Few companies enjoy the
especially in its early differentiation in product,
monopoly privileges service, process, or
afforded by market gaps. stages of growth, a
company must stand out... marketing.

Enduring difference
Only then will companies can only be maintained But difference can
truly stand out in through a Unique be easily copied
the market. by competitors.
Selling Proposition.

customers something that the prices and protects profitability; the design and functionality of Nike
competition cannot or does not and it can give businesses the and Adidas sneakers are distinct,
offer—a Unique Selling Proposition competitive advantage needed the differences are so small that
(USP). The concept was developed to stand out in the market. they amount to only a marginal
by US advertising executive Rosser difference in performance. The
Reeves in the 1940s to represent The challenge of difference products’ differences are, however,
the key point of dramatic difference By definition, not all products can magnified in the perception of the
that makes a product salable at a be unique. Differentiation is costly, consumer through marketing and
price higher than rival products. time consuming, and difficult to the power of branding—uniqueness
Tangible USPs are hard to acquire achieve, and functional differences is achieved through brand imagery,
and hard to copy, which is what are quickly copied—“me-too” promotion, and sponsorship.
makes them unique. strategies are commonplace. Apple achieved differentiation in
Companies must distinguish Touchscreen technology was the fledgling digital-music market by
their product or service from the introduced to the cell-phone market combining easy-to-use software ❯❯
competition at every stage of as a point of differentiation for
production—from raw material Apple’s iPhone, but is now a feature
extraction to after-sales service. of most smartphones.
Products such as Nespresso coffee- Differentiation often does not
makers and Crocs footwear, and remain a point of difference for long.
service providers such as majority With functional uniqueness There is no such thing
Asian-owned hotel group Tune being so elusive, marketing guru as a commodity.
Hotels, are all heavily differentiated, Philip Kotler suggested that All goods and services
each having a strong USP. companies focus instead on an are differentiable.
The primary benefit of Emotional Selling Proposition (ESP). Theodore Levitt
uniqueness, however it is achieved, In other words, that the task of
US economist (1925–2006)
is greater customer loyalty and marketing is to generate an
increased flexibility in pricing. emotional connection to the brand
Differentiation guards products that is so strong that customers
and services from low-priced perceive difference from the
competition; it justifies higher competition. For example, while