Q&A: marketing terms: competitive parity, USP and value proposition

Update: 2015-10-24: Removed dead Answers.com link.

My student Yeping in China asks about a few terms used in marketing & advertising.

1. What is competitive parity?

My answer:

Competitive parity is one way of deciding your budget for marketing and advertising. Basically you spend a similar amount of money as your competitors do.

• Business Dictionary - competitive parity
• LearnMarketing.net - Marketing Budgets

2. What is the difference between USP and value proposition?

The USP (unique selling proposition or unique selling point) of your product is one single aspect that makes your product special & different from all competing products; what makes it unique.

The value proposition of your product is all (not just one of) the benefits that your product can bring to the customer.

• Jill Konrath - Elevator Speech vs. Unique Selling Proposition vs. Value Proposition
• RelevanceSells.com - Value Proposition vs Unique Selling Point