Hi everyone,
I am currently writing a master's thesis at a small startup about strategic positioning. I have already studied the literature in detail. Very often the tool Value Proposition and USP is mentioned in the implementation of strategic positioning, but unfortunately the statements about it are often a bit different and I don't understand the connection 100%. Strategic positioning lies in the area of tension between customer and competitor and thus has many overlaps with the two terms mentioned. Once the positioning must be a USP / UAP against the competition, but at the same time also bring value to the customer, here the value proposition can be applied. What confuses me is that sometimes both the USP/UAP and the Value Proposition are done before the strategic positioning and sometimes not. I would like to find some literature that shows the connection in terms of a process or with the correlations. Is there anything like that?
I thank you in advance!
There are some major differences between the three which are all inter-related:
Strategic Positioning: A company's relative position within its industry matters for performance. Strategic positioning reflects choices a company makes about the kind of value it will create and how that value will be created differently than rivals.
Value Proposition: It refers to the value a company promises to deliver to customers should they choose to buy their product. A value proposition is part of a company's overall marketing strategy.
While the USP situates a business in relation to its competitors, the value proposition focuses more on how customers' lives will be improved by working with the business.
In my view strategic positioning is how a company places itself in the market as regards its offerings like manufacturer of quality products.
Value proposition would be what is that the company brings to the table which the customer is able to perceive.
USP on the other hand coveys the benefit/solution the firm is going to offer to the customer like healthy snacks, white as milk teeth(toothpaste) etc.
https://strategicmarketingpartner.com/unique-selling-proposition-vs-value-proposition-with-examples/
They are related between the value proposition and the unique sales proposal (USP), in the first it provides the set of benefits to the product or services, and the second provides unique benefits in the positioning of the brand different from that of the competition.
First be aware that strategy does not happen in isolation. To be able to design the organisational structure and create the strategic context the entrepreneur needs to have a total understanding of the structure of the market s/he wants to enter. How does it operate? What is the role of the product in an industry? Which needs are fulfilled by the product?
Management needs to have information about the product that is going to be produced and what type of people would use it. What part does the product play in the users’ lives. What needs do they have? How do they define quality? What quantity do they use? What are the implications of the performance of the product? And so on.
Then ask: what is a strategy? It is the thoughts and actions and decisions that will be taken about the way in which the organisation will be financed, structured and how it will create and deliver its products and services (for marketing see the 7 P’s management model).
Hence, definition and selection of the markets you intend operating in, form part of the strategy. i.e. you look for a match between the product you finally offer and the characteristics of the users, their values; and the criteria they use when selecting products from the product class.
Strategy is spelt out in a written plan which is reviewed regularly to take account of changes in the environment. It includes all the decisions that have been taken about the features of products and their associated services. Strategy also defines the description of the entire market that could use the product, PLUS the chosen served market(s) or segments of the market that can be reached and are willing/able to buy the product.
The strategic positioning is the resulting outcome of all the decisions taken relative to what other suppliers offer. It consists of choice of the features and benefits that are relevant in the selection and use of a product.
As others have said. the value proposition consists of what you (the supplier) tell them about the product. You must convince the target market that product meets or exceeds their needs and wants. Remember that value is not only counted in financial terms. Value also rests in the satisfaction that the product provides when using it. It could be for the level of prestige it brings. Perhaps it is the convenience or time saving provided through the product’s use? The value proposition will only be believed when, you as the supplier speak the same ‘language’ as your target market. It is only if in your choice of product quality, pricing, packaging, processes, distribution channels, and communications you show that you understand and respect their needs, that the market will be reassured of your credentials.
Then the Unique Selling Proposition or Point. This emerges from your value proposition. The USP consists of the key factor(s) which differentiate your product from those offered by competition or other solutions in the market. To have a USP the feature has to be exclusive to this product – the benefit must be experienced by the user – and other suppliers find the value on offer difficult, or impossible to copy.
As you can see these concepts are intertwined and are not static. Your ability to develop relevant positioning and an appropriate value proposition emerges from identifying and understanding the market needs. The USP follows through identifying and building in the features which are highly attractive to the market and available exclusively via this product.
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