24 replies to this topic

[Randy]

The Southwest example is a great one, and the opposite can be proved by using RyanAir.

An excellent point and example OD. There are others who have attempted to follow Southwest Airlines low cost model. All of them so far have failed miserably because they missed the point. Most are now out of business after having lost millions.

[nethy]

I think that telecoms/infrastructure are the worst case study possible for marketing theory. In a industry that tends towards oligopolies/monopolies the rules are different and most things don't apply.

The Telcoms are not competing in a normal market where they have the same interests as a shoeshop that competes with other shoe shops. Their marketing/pricing strategies directly influence the market as a whole. Its these effects they tend to be most worried about. In a normal market you don't get to make decisions about the market, you just try to sell at a price that maximises your profits rather then the industry's/market's. That's why everything goes funny and doesn't follow normal market rules.

IMO regulation/deregulation never totally cures this. Some industries just have high barriers and inefficiency is unavoidable.

Do you consider Price as a USP? or Quality ?
Because don't most people buy something online because it is of their acceptable quality at the lowest possible price?
That's not unique, that's supply demand / bulk buy power / out sourced manufacturing to places like china.
Give me a specific example of USP for online shopping, i'm struggling with this concept!

Back in Marketing 1001 (101 in the US): In theory there are two macro pricing strategies differentiation or low cost. So Your USP can be price or quality (among all possible differentiation possibilities)

In practice, almost everyone contradicts this because because every market is an oligopoly to an extent (the corner store has a monopoly on the staff's relationship with customers, their location, etc.). Theoretically the oligoplistic characteristics of markets, especially retailing were supposed to fade with the growth of ecommerce but I don't think this has happened at all. You can tell by price differences between store. So theory seems to be worth about that much.

The hard feature you differentiate with online retailing are mostly 'shipping' , 'site quality' , 'stock availability' & 'price.' But I think the soft features are more important. Trust & familiarity are big ones.

But take Amazon as a case study they nail the hard features and they do well with the soft ones too.

Give me a specific example of USP for online shopping, i'm struggling with this concept!

I think a good place to start is distinguishing between USP and it's communication (IE the tag line). 'Lowest prices', 'One stop shopping' or 'quality guaranteed' are a great USP but a crap tagline for the same reason that the keyword tag gets ignored - 'They say' has 0 correlation to 'they are'. But Wal Mart built the worlds biggest company on the first two.

IMO, the to issues- figuring out the USP & figuring out how to communicate it - are different. The problem with the 'right' USP (IMO low prices can & are USPs) is that everyone claims it. A USP that can be communicated well is an advantage. A USP that explains itself is even better. (IKEAs USP is built into their weird product names and Swedish meatballs. Aldi's you can see with he speed the checkout works, the pallet displays and the no-name products).

If you want to just say it, I would go an indirect route ('not for...' , 'made for...') or via locked in figures ('guaranteed next day delivery' '20%-50% of RRP').
My own theory is that consumers don't give you a free ride with telling them about yourself. EG If your willing to alienate home users ('only for professional builders'), the pros might give you a go. They can smell 'cover-your-assness' and small print (up to 50%).

Personally I thing that the tagline (lowest prices, guaranteed) and other rough mediums are not where you set your USP. They are where you communicate association and tell consumers what class or genre are you in (discount retailer, full service retailer, speciality retailer) who you are similar to (rather then who you are different from). The actual USP gets communicated more subtly.

Edited by nethy, 15 June 2008 - 11:40 PM.

[1dmf]

An excellent point and example OD. There are others who have attempted to follow Southwest Airlines low cost model. All of them so far have failed miserably because they missed the point.

Not quite true Randy - EasyJet! , old Stelios has embraced 'Cheap' like you wouldn't beleive - I'm off to Sofia on my Stag Reuinion the 3rd trip with EasyJet - talk about a cheap flight!

He now has EasyCruises, EasyPizza, you name it he does, just look at their portal site

CODE

http://www.easy.com/

I'm waiting for him to go into the Escort Agency industry....... EasyEscort -> has to be a winner surely

[nethy]

Theoretically, new markets start out on the differentiation side of the spectrum and move towards the low-cost/commodification side as they mature.

Businesses tend to drift towards low cost as they grow because its usually where the big market is.

Especially in the SME world it tends to be discounted as an approach offhand, but the big markets are generally the low cost markets. Few really succeed in really big markets (competitive one- monopolistic/oligopolistic markets don't count) as differentiators. Its just usually not viable for small businesses do do it and they don't usually worry about things like market share anyway so they don't actually care about the size of a market.

Edited by nethy, 16 June 2008 - 08:35 PM.

[Catz]

EasyJet! , old Stelios has embraced 'Cheap' like you wouldn't believe
He now has EasyCruises, EasyPizza, you name it he does, just look at their portal site easy.com

Looks like you came up with a place with a Unique Selling Proposition of your own.

They found a way to set themselves apart from their competitors to convince people to patronize their company.

They made themselves Unique by putting into people's minds that they can make it Easy to do just about anything ...with their help.

Edited by Catz, 16 June 2008 - 11:50 PM.

[1dmf]

Not Easy , CHEAP! nothing with EasyJet is easy, I take it you haven't flown with them

I just hope the hostesses have hotpants when we go to Sofia later this year

[Catz]

Whether it is true or not, they are "putting into people's minds" that they can make it Easy to do or get things.

It is afterall simply an advertising tactic to get your money

...and even though you point out that dealing with them is not actually easy, because they are cheap, you are still willing to give them a go.

Good luck on the hotpants.

[1dmf]

Good luck on the hotpants.

lol thanks. knowing my luck it's be all the men cabin crew!

[FERDINAND]

Hi Friend's
In the early years their Hostesses wore hotpants. Their fares are almost always lower than anybody else when the first enter a market. They make every other airline in the markets they're in lower their fares. Other positive things they're known for are being a bit irreverant and just plain old fun. They're known for other things too of course.

[1dmf]

Then again have you seen the new Virgin advert,