Entrepreneurship – from ideas to reality
Entrepreneurship – from ideas to reality

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Entrepreneurship – from ideas to reality

4 Brand or USP?

Think of some recent consumer products you have bought – it could be clothing or shoes; a technology product or toiletries, beauty products or even washing liquid. How did you decide what to buy? Perhaps you have a favourite or perhaps you are convinced that you only ever buy the cheapest available. How your customers make their choice is vital to understand if you are going to communicate effectively with them about the value of your own business or products.

In Activity 2 in the previous section you differentiated between features and benefits. Sometimes these features or benefits can be unique – so unique that they are memorable and lead to a point of difference, which people are prepared to pay more for. They may even be patented. Think of the mint with the hole. It is unique, memorable and a trademark. Think also how UK households are filled with containers that once contained a product – e.g. a coffee jar of a particular shape with a seal that can be reused as a storage jar. These unique features add value and encourage loyalty beyond the preference for the taste of the coffee, especially where the product inside may not provide the basis of a strong preference.

Now think back to those trainers you or a teenager you know may have purchased – was the decision really based only on price? It may have been if you had budgetary constraints, but then where there are multiple products in the same price range how would you decide? There are many consumer purchases where the label or brand is as important. The brand is important for a number of reasons. It may confer a certain value or imply the wearer’s values and style through being classic, high quality, or trendy and popular. The brand is associated with these values and for this reason customers tend to be prepared to pay more for this association. Some household names have famously become so popular they have become ‘genericised’ – think Hoover, which ultimately became a verb, as has Google (to google it)!

Having a good brand name will help your business to stick in the minds of prospective customers and customers, but this takes a lot of time, marketing and communications activity, and often budget to achieve any serious level of awareness. It can therefore be very hard for a new business to establish itself as a brand from a standing start.

Reflection

Before you go on to define a value proposition for your own idea (or one for a product or service you are familiar with), consider the following questions:

  • In what ways do you think a product or company name can suggest something about a product or service that customers will experience?
  • Can it convey a particular image or suggest something that separates it from others in the marketplace?
  • How do brands and USPs impact on the price? How about the customer’s perception of value?
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Now listen to the following videos where our entrepreneurs are asked about their business’ value proposition. Listen to how they have thought it through and how useful a value proposition is as a concept for them. You may want to take some notes in a noteboook to capture your ideas when they occur. What did the entrepreneurs say about their value proposition?

Download this video clip.Video player: Video 1
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Transcript: Video 1 Value proposition

EMMA PRINCE:
So at the outset of setting up I didn't have a value proposition as such, because I was just looking to meet a need in my local community. But as things developed, I was looking for advice and support. So part of that was entering into a competition with the Open University, the process of which you had to complete quite a lot of detailed information about your business and what you were trying to achieve. And so I had to start thinking about things like that, value proposition and what it was I was going to say.
And that's kind of evolved as well, because the company has expanded as I hoped it would. And we're now offering quite a few different things, so what was originally our value proposition in terms of the mentoring and coaching has now changed. So we're just at the process now as a team of sitting down and putting together what our value proposition will be from now on.
CLAUDIO MARTURANO:
The value proposition for my company is the fact that the regulatory training has to be carried out by maintenance personnel. Through the use of my learning management system, it can be broken down into bite-sized training modules from 5 to 30 minutes. The main proposition is that instead of engineers having to be taken off shift to carry out training, they can now carry out that training whilst on shift.
It makes two main benefits. One, the end user has constant information and information retention. And the actual organisation saves tens of thousands of pounds a year, because they don't have to take personnel off shift. And so they don't have to work planning deficits.
NICK ALLEN:
We try to make sure that everything we produce is very high quality. We try to make sure we are bringing some happiness to people's lives. We talk about enchantment a lot. What we like is those few moments where people get drawn into the designs. You look at them from afar, and they look very pretty. But when you get closer, you start to see the detail. And people get drawn.
It's a lovely moment when you see people. And we've had people come up to us and say, you know what? I love scuba diving. I really like that scarf because it really reminds me of it. It's those little connections. That is exactly what we were about.
CLAUDIO MARTURANO:
The value proposition as the main point of a business plan. If you don't have that, you don't have the selling point to the end user. So having that value proposition is always something that is a conversation starter. It's always something that leads on to the next conversation, leads on to the next sale. You always have to have that as an entrepreneur.
EMMA PRINCE:
I think it's useful in terms of it's really clear what it is that you're offering and what your customers can expect from you. There's an awful lot of people who I've noticed on social media and just through networking who say, yes, I do coaching, or I do mentoring. And nobody's really clear about what that means. And it can mean so many different things to different people. So I think having that clarity there is really helpful for us and for the people that are seeking support.
NICK ALLEN:
So looking at a value proposition quite early on was very useful. When you're not sure how your business is going to go forward, trying to understand what value you are adding to the customer is extremely helpful, because it helps you steer away from the things that you're not going to be useful for. When you know that some of your competitors, at least, are enormous companies, it gets a bit disheartening. But when you start to think to yourself, OK, are we really competing against those people, or is our market a little bit more like this area of the luxury market, it became a lot easier.
ALEX BOND:
Absolutely it's useful to have a value proposition. Our first idea didn't have one, and we didn't know what we were selling to people. But now we have a value proposition, and we can say to people that we can save them a quarter of their current operating costs on hygiene auditing, which amounts to 75 million pounds in the UK total, which is a huge saving for companies. And we can save them time, and we can also make it simpler. So they don't have to have professional training to use the tools that are currently available. And by being able to describe this in such a concise, easy term, it just-- everyone says, yes, we want that. Of course we do.
End transcript: Video 1 Value proposition
Video 1 Value proposition
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Next you will work on defining your own value proposition.

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