POINTS OF PARITY AND POINTS OF DIFFERENCE
Once the competitive frame of reference for positioning has been fixed by defining the customer target market and nature of competition, marketers can define the appropriate points-of-difference and points-of- parity associations.
Points of difference (POD) are attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand. Strong, favorable, and unique brand associations that make up points of differences may be based on virtually any type of attribute or benefits. Examples are FedEx (guaranteed overnight delivery), Nike (performance), and Lexus (quality)
Creating strong, favorable, and unique associations as points-of-difference is a great challenge, but essential in terms of competitive brand positioning. Consider the success of IKEA as a case study,
Swedish retailer IKEA took a luxury product home furnishings and furniture and made it a reasonably priced alternative for the mass market. IKEA supports its low prices by having customers self-serve, deliver, and assemble the products themselves. IKEA also gains a point-of-difference through its product offerings.
IKEA built its reputation on the notion that Sweden produces good, safe, well-built things for the masses. It has some of the most innovative designs at the lowest cost out there. It also operates an excellent restaurant in each store (rare among furniture stores), offers child-care services while the parents shop; offers a membership program entitling members to special discounts on their purchases beyond the normal low price and mails out millions of catalogs featuring the latest furniture.
Points of Parity (POP)
POP on the other hand, are associations that are not necessarily unique to the brand but may in fact be shared with other brands. These types of associations come in two basic forms category and competitive.
Points of Parity are associations of consumers who view as essential to be a legitimate and credible offering within a certain product or service category. In other words, they represent necessary but not necessarily sufficient conditions for brand choice. Consumers might not consider a travel agency truly a travel agency unless it is able to make air and hotel reservations, provide advice about leisure packages, and offer various ticket payment and delivery options
Category points-of-parity may change over time due to technological advances, legal developments, or consumer trends, but they are the â€œgreens feesâ€? to play the marketing game.
Points-of-parity are associations designed to negate competitorsâ€™ points-of-difference. If, in the eyes of consumers, the brand association designed to be the competitorâ€™s point-of-difference is as strong for a brand as for competitors and the brand is able to establish another association as strong, favorable and unique as part of its point-of-difference, then the brand should be in a superior competitive position.
In other words, if a brand can â€œbreak evenâ€? in those areas where the competitors are trying to find an advantage and can achieve advantages in other cases, the brand should be in a strong and perhaps unbeatable competitive position. While other luxury-goods makers slumped in 2000, Coach saw its sales zoom ahead by adding style and fashion to its legendary rugged bags and briefcase. As another example, consider the introduction of Miller Lite beer.
The initial advertising strategy for miller Lite beer had two goals assuring parity with key competitors in the category by stating that it â€œtastes great,â€? while at the same time creating a point : It contained one-third less calories and was thus â€œless fillingâ€? than regular, full strength beers.
The point-of-difference was somewhat conflicting, as consumers tend to equate taste with calories. To overcome potential resistance, Miller employed credible spokespeople, primarily popular former professional athletes, who would presumably not drink a beer unless it tasted good. These ex-jocks humorously debated which of the two product benefitsâ€”â€œtastes greatâ€? or â€œless filingâ€? â€“ was more descriptive of the beer. The ads ended with the clever punch line â€œEverything youâ€™ve always wanted in a Beer and Lessâ€?.