EXAMINING UNIQUE SELLING POINT (USP) AND CUSTOMER PATRONAGE IN BUSINESS ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1 Background to the study

A unique selling point (USP, also seen as unique selling proposition) is a feature that differentiates a product from its competitors, such as the lowest cost, the position, the highest quality or the first-ever product of its kind or nature. The unique selling point is a marketing concept first proposed as a theory to explain a pattern in successful advertising campaigns in the early 1940s. The USP states that such campaigns made unique propositions to customers that convinced them to switch products.

Purchasing behavior is the decision process and acts of individuals involved in purchasing and using products, which includes social and mental process (Kotler& Armstrong 2004). Understanding Consumer behavior is vital as it helps marketers to predict all consumer actions involved before choosing to purchase one thing over the other. Consumers also get to know of other influential factors that determine the purchasing decision. Purchasing behavior is influenced by four factors which include cultural, personal, social and psychological factors. Most of these factors should be considered while trying to understand the complex behavior of the consumers. (Solomon, 1995)

The consumer’s decision making regarding purchasing and utilization of different goods and services is influenced by many internal and external factors. Among the external factors, the most important are; the qualities of the product itself, the brand and the package in which it is incased. Non-product related qualities are the external aspects of the product or service that relate to its consumption such as the price information, packaging or product physical appearance, user imagery and usage imagery. (Mullen, 1995) Demographic factors that influence the customer’s purchasing behavior are the internal factors such as age, gender, income, occupation, education, family size, religion, generation, nationality and social class. The market is hence divided based on these factors which differentiate customer groups as the customer needs. (Kotler, 2001)

According to Zeithaml (1988) Consumer perceptions of price, quality and value are important determinants of shaping behaviors and product choice. They are the key factors affecting consumer perception. Most of the consumer factors correlated with attitude include; personality, perceptual and socioeconomic (Batra & Sinha, 2000). Consumer perceptual variables that have been identified include price, quality perception, perceived quality, value consciousness, price consciousness, perceived price fairness, smart shopper self-perception, familiarity with goods, brand loyalty, perceived risk associated with purchase, risk averseness and general deal proneness.

(Garretson et al.,2002) cited by (Mutheu, 2014,6)

1.2 Statement of the problem

There has been a problem in the hospitality industry in meeting the consumer purchasing decisions. In addition, there has been an increasing rate of competition between existing and new hotels in the need of catering for the advancing present day consumer needs and preferences and hence the importance of possessing a unique selling proposition. Furthermore, new business models such as sharing economy and AirBnB are increasing the competition.

1.3 Objectives of the study

The main objective of this study is to examine the effect of unique selling point (USP) on customer patronage in a business organization.

Specifically, the study tends to

1. Examine the importance of the 4 p’s of marketing mix in consumer patronage.

2. Examine the effect of price on consumer patronage of the organization.

3. Examine the effect of location on consumer patronage of the organization.

4. Examine the effect of product and promotion on consumer patronage of the organization.

1.4 Research Questions

1. What is the importance of the 4 p’s of marketing mix in consumer patronage?

2. What is the effect of price on consumer patronage of the organization?

3. What is the effect of location on consumer patronage of the organization?

4. What is the effect of product and promotion on consumer patronage of the organization?

1.5 Significance of the study

The study will be of importance to the management hotels as it will be able to adopt unique selling proposition that will boost consumer-purchasing decision. The study will benefit researchers who may wish to develop the study further through subsequent researches and the academicians wishing to enrich their knowledge on the concept of customer purchasing decision.

1.6 Scope of the study

The study sought to establish the influence of unique selling proposition on consumer purchasing decisions. The study is based on international hotel customers’ perception of the various characteristics of hotels. The limitations of this study are related to number and nationality of the respondents. The study assumed that the participants honestly and truthfully responded to the questionnaires and interview.

1.7 Limitation of the study

Since the study was only carried out in only one province, the results may not be generalisable to the whole country. The researcher collected data on his own without research assistants.

Financial constraints were also anticipated in the current study. Although the researcher received assistance from the bursary, it was not possible to carry out the study at national level.

1.8 Organization of Study

The study is divided into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.