Points-of-parity/points-of-difference

Points-of-difference (PODs) – Attributes or benefits consumers strongly associate with a brand, positively

evaluate and believe they could not find to the same extent with a competing brand i.e. points where you are
claiming superiority or exclusiveness over other products in the category.
Points-of-parity (POPs) – Associations that are not necessarily unique to the brand but may be shared by other
brands i.e. where you can at least match the competitors claimed bets. While POPs may usually not be the
reason to choose a brand, their absence can certainly be a reason to drop a brand.
While it is important to establish a POD, it is equally important to nullify the competition by matching them on
the POP. As a late entrant into the market, many brands look at making the competitor's POD into a POP for the
category and thereby create a leadership position by introducing a new POD.
The assessment of consumer desirability criteria for PODs should be against:

 Relevance
 Distinctiveness
 Deliverability
Whilst when assessing the deliverability criteria for PODs look at their:

 Feasibility
 Communicability
 Sustainability
These will help understand how successful these PODs are likely to be in the minds of the consumer.
Kevin Keller and Alice Tybout  note there are three types of difference: brand performance associations; brand
imagery associations; and consumer insight associations. The last only comes into play when the others are at
parity. Insight alone is a weak point of difference, easily copied. Putting these together, check their desirability,
deliverability and eliminate contradictions.
Traditionally, the people responsible for positioning brands have concentrated on the differences that set each
brand apart from the competition. But emphasizing differences isn't enough to sustain a brand against
competitors. Managers should also consider the frame of reference within which the brand works and the
features the brand shares with other products.
Asking three questions about your brand can help:

1. Have we established a frame? A frame of reference signals to consumers the goal they can expect to
achieve by using a brand.
2. Are we leveraging our points of parity? Certain points of parity must be met if consumers are to perceive
your product as a legitimate player within its frame of reference.

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 3. Are the points of difference compelling? A distinguishing characteristic that consumers find both
relevant and believable can become a strong, favourable, unique brand association, capable of
distinguishing the brand from others in the same frame of reference.
Points-of-Difference and Points of Parity
 

What are points-of-difference (POD)?

When deciding upon a brand’s/product’s positioning in the marketplace, the organization must ensure that end
positioning has both sufficient points-of-parity (POP) and points-of-difference (POD). What this means is that
you want the brand/product to be consider equal/similar (on par with, hence the word ‘parity’) with the major
offerings in the category for the key attributes (POP), but the brand/product also needs to have a number of
unique or differentiated attributes (POD).
An appropriate balance is required for market success. Too much reliance on points-of-parity in the product’s
positioning and it could be perceived as a ‘me-too’ product offering. And too little emphasis on points-of-parity
and the product might be perceived as not meeting the core needs for the target market.

 Definitions for points-of-difference (POD) and points-of-parity (POP)

Points-of-difference (POD) and points-of-parity (POP) are essentially opposite in nature, with the first referring
to differences in the second referring to similarities. As a result, we can the following definitions for our
purposes as students of marketing:

Points-of-difference (POD)

The aspects of the product offering that are relatively distinct to the offerings of like competitors.

Points-of-parity (POP)

The aspects of the product offering that are largely similar to the offerings of like competitors.

 You will note that both definitions referred to the offerings of competitors, so these terms are relative measures.
And to clarify the word ‘aspects’; it refers to the various product features, benefits, brand equity, and other
marketing mix elements (including price and place, plus any associated marketing mix elements of services).

Understanding PODs and POPs

Typically, a firm decides the positioning of a product when it is either: entering a new target market for the first
time or launching a new product into an existing target market. In either case, the product will usually need to
win market share from established competitors (which is referred to as selective demand).

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For the product to win market share, it requires existing consumers in the marketplace to change their
purchasing behavior. That means that customers who currently buy a competitive product will need to trial the
new offering and/or current non-consumers need to be activated to purchase in the product category for the first
time (which is primary demand).

To achieve this goal of changing established purchasing behavior, the firm has both meet the core need of
product, as well as bring something new to the marketplace. The following diagram demonstrates this in visual
terms. As you can see, the large circle in the middle of the diagram represents the core needs of the market
(points-of-parity) and the smaller circles represent new features or benefits (points-of-difference).

Therefore, the positioning of any new entrant needs to have many points-of-parity (that is, it must be seen to
offer a relatively similar solution), but it needs to have something unique or different about it (points-of-
difference). (For more information, please refer to the example section below.)

The POD – POP Trade Off

One of the challenges for a firm launching a new product offering is to the extent that they differentiate the
product. As outlined in the positioning section of this marketing study guide, one of the purposes of positioning
is to simplify the offering in the minds of the consumer.

As we know, marketing communication is a very competitive world and it is difficult to communicate many
messages about a product, particularly low-involvement one. Therefore, as it is necessary to simplify the
message, firms need be careful about overindulging in points of difference.

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As shown in the following diagram, there is a distinct trade-off between the ability of the firm to communicate
points-of-parity and points-of-difference. This is because consumers are likely to only remember a few elements
about the product. .Ideally, an organization would like to communicate everything about all of their products,
but that is just not practical given the interests of the consumer and the vast array of marketing messages being
sent out.

Therefore, firms need to strike an appropriate balance and to position the product within the product category as
having sufficient points-of-parity, while highlighting one or two points-of-difference.

Unique Selling Proposition (USP)

The concept of a unique selling proposition (USP) has become quite popular in terminology in recent years.
Essentially what this refers to is points-of-difference and you can use the terms interchangeably if required. A
point-of-difference is basically what is different about the firm’s product, as compared to most competitive
offers. The same meaning is applied to the term ‘unique selling proposition’; that is, what is unique (that is,
different) about the firms offer.

What to emphasize POD or POP?

Continuing on from the discussion on the previous section, while firms do need to balance their emphasis
between points-of-parity (POP) and points-of-differentiation (POD) there are occasions when a firm should
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more heavily emphasize one of these elements. The following table outlines the circumstances when a greater
emphasis is required.

Situation What to emphasize

When the firm is a ‘me-too’ In this case, being a weaker competitor, the goal is to piggyback on
competitor the success of the market leader by highlighting many points-of-
parity

When the firm as a market leader This is the reverse situation from the one above. To maintain market
leadership, the brand/product needs to be seen in as
superior/different in key ways, thus highlighting the need to focus
on relevant points-of-difference

When the firm enters an established In this case, the likelihood of switching is relatively lower,
and mature market so points-of-difference are required to break their habitual loyalty

When the firm and is a fast- Fast-growing markets have primary demand (that is, first-time
growing market customers to the market), therefore points-of-parity positioning
will should be quite successful in capturing new customers

When there is a diversity of needs, When there is significant diversity of consumer needs, a points-of-
even when looking at fairly narrow difference positioning should ensure that reasonable market share is
market segments generated

In a target market where the firm To reduce the risk of cannibalization of sales, the firm would need
already offers multiple products to have more emphasis on points-of-difference

In a relatively price sensitive Our goal in this case would be to provide additional benefits, in
market order to reduce the importance of price in the decision. Therefore,
a points-of-difference positioning emphasis would be required

Points of Parity versus Points of Differentiation

Identifying your brand’s points of parity and points of differentiation is the essential first step of every
positioning project. That is, understanding the market you operate in and what makes your brand different from
competition.

I am sure you are very familiar with slogans similar to these: “Our employees make the difference”, “Quality is
our job number 1”, “We Deliver Great Customer Service”. These slogans are indeed very popular, but also a
very ineffective way to differentiate a brand. That’s because they more often than not promote a brand’s point
of parity instead of focusing on the points of differentiation.

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Identifying the points of parity and points of differentiation is industry specific. There is no generic rule that can
be applied across the board.

Points of parity are those elements that are considered mandatory for a brand to be considered a legitimate
competitor in its specific category. It is what makes consumer consider your brand, along with your
competitors. So before you work on identifying your competitive advantage, you want to make sure you
identify what it takes to be a player in your category, and have all these points covered.

I will use a personal example to illustrate this concept.

I am currently in the market for a new car for my growing family. When comparing various offers, I consider
the following aspects of buying and owning a car points of parity:

- a showroom located within reasonable proximity, where I can see the models

-a demo model that I can test-drive

-a 3 year comprehensive warranty

-available financing

I am not considering any car brand that is not able to meet these four criteria. Those elements will not bring any
benefit to a brand if advertised because the consumer considers them as a given. (Nobody expects to buy a car
with less than 3-year warranty).

On the other hand you cannot launch a new brand without making sure you meet the points of parity.

Points of differentiation are the attributes that make your brand unique. It is your competitive advantage. It is
what your brand slogan should reflect.

Let’s come back to the automotive industry.

Hyundai took a point of parity and made it a point of differentiation: they were the first brand that offered a 5-
year comprehensive warranty in Canada (10 in the USA), instead of the industry standard of 3 years.

Subaru made the all-wheel drive system its competitive advantage, brilliantly reflected in their slogan
“Confidence in Motion”.

No car brand communicates the “3 year warranty” or “front wheel drive system” a competitive advantage. And
rightfully so: these are points of parity, not points of differentiation.

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The Meaningless Slogan Trap
Now let’s go back to the so-common slogans at the beginning of the article: “Our employees make the
difference”, “Quality is our job number 1”, “We Deliver Great Customer Service”.

Good employees, quality, and service are a given in almost any category. Is anybody expecting to survive and
grow with bad employees, poor quality products and rude customer service?

If your company is using a slogan similar to the ones in the first paragraph then it’s probably time for a brand
repositioning exercise. That is unless your competition is famous for not delivering what you are promoting (be
it quality, service, good employees. Then your slogan makes perfect sense. Otherwise don’t waste your
advertising budget promoting points of parity. Find out what attributes make your brand unique and build your
communication strategy around them.

Points of Parity and Points of Difference

Once a marketer has defined the target market and the type of competition, it’s imperative for the marketer to
define the basis of this positioning. This can be done by the defining the Points of Parity and Points of
Difference.

Points of Parity (POP) are usually the attributes or functionalities or benefits or any other marketing mix
elements that are not unique to the brand and might be shared by some or all the competitors, as they mostly
include the basic necessities for a brand to be considered in a particular category.

There are two types of Points of Parity:

i)           Category Points of Parity: These represent the necessary elements that a brand should possess for a
consumer to consider it in a particular category. In other words, these elements ensure that a consumer
considers your brand too while considering your competitors.

ii)          Competitive Points of Parity: Once your brand provides the basic elements required by the category,
the next step is to add elements which would negate the competitors’ points of difference. It gives a brand a
good competitive positioning if it can provide similar or better elements as compared to its competitor’ POD. 

Once a brand has established its Points of Parity, to be considered in a specific category and negated its
competitors’ advantage, the next step is to develop and highlight its own advantage in the category.

Points of Difference (POD) are usually the attributes or functionalities or benefits or any other marketing mix
elements that a consumer strongly associates with a brand, which he/she feels is not offered by and of the
competitors. To define in short, Points-of-difference are relatively distinct aspects of a brand, as compared to its
competitors.

Unique Selling Proposition (USP)

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Basically Unique Selling Proposition is the distinctive unique product benefit, not offered by any competitor.
Hence, Unique Selling Proposition and Points of Difference invariably talk about the same thing.  Quite often
you’ll notice these two terms being interchangeably used. In the 1950s, the Rosser Reeve and Ted Bates
advertising agency emphasized that, what was said in an ad was more important than how it was said. Thus it
became more important for ads to highlight the unique difference rather than be the most creative.

Many a times a brand needs to decide which has to be given more emphasis, Points of Parity or Points of
Difference. Below are various circumstances:

1.       Brand is a market leader – In this case, the brand needs to highlight the superior and key differences, thus
the brand needs to focus on its Points of Differences.

2.     Brand as a “me-too” or  a follower brand – In this case, the brand needs to piggy-back on the market
leader, hence the brand needs to highlight the points of parity  with the market leader.

3.       Brand entering an established and mature market – In this case, since the consumer switching would be
low due to customer loyalty, hence the brand needs to highlight the points of difference.

4.       In a target market where the brand offers multiple products – In this case, the brand should emphasize on
the Points of Difference of all the products in order to avoid the cannibalization.

5.       In a price sensitive market – In this case, the brand needs to provide additional benefits to the customers,
so that customers feels he’s getting more value for his money. Thus emphasis should be on Points-of-difference.

In Summary, Points of Parity is what gives a brand a competitive positioning in a category, while it’s the Points
of Difference which gives a brand a competitive advantage over the competitors in that category.

What is a Point of Difference?

A point of difference is exactly what it sounds like– it is something that makes you different from your
competition (oh, and it also has to be something your customer actually wants).
It’s pretty easy to start figuring out your points of difference. Start by asking yourself:

“Why do people buy my product or service?”

Think of as many reasons as you can why people buy stuff from you. If 1) you can’t think of any good reasons
or 2) no one buys stuff from you, positioning might be the least of your worries. Try bankruptcy. Or a new line
of work.

Once you have a list of possible reasons people would want to buy stuff from you, ask yourself the follow-on
question:

“Why do people want this stuff from me instead of from my competitors?”

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My guess is you will start crossing some things off the list your competitors deliver just as well as you or better.
Be honest. Think like a customer, not a proud corporate citizen.

Hopefully you will still see a few things left on the list. These are the true things that differentiate you. If you
don’t see any defensible differentiators left, you may have uncovered a positioning problem.

I think this way all of the time now. I am a 100% certified positioning nerd.

Example: I walk into a new Mexican restaurant a few weeks ago with some of my co-workers. There are a lot of
Mexican restaurants within 5 minutes of our office. So why did I pick this one? Here are some possible points
of difference this restaurant might have from its competitors (yes, I actually did this in my head):

1) the salsa is better

2) the queso dip is better

3) the ambiance is better

4) the prices are better

5) it is more authentic

Well it turns out none of these things were true for this place. The food was average. The service was average.
The ambiance was average. Prices were the same. It was no closer or further away than 5 other Mexican places.
The only point of difference it had going for it was that it was new. And being new is not a sustainable point of
difference.
Will I go again? No. Does this place have a positioning problem? Yes. It will be out of business in 6 months,
unless it uncovers some sort of unique positioning that differentiates it from its better established competitors
(Late night tequila shot contests? Mariachi lessons? Let’s get creative, people!)

What is a point of parity?

Most simply, a point of parity is a point of difference that a competitor has over you that you need to counteract.
In many cases, you won’t even be able to compete in the market unless you can nullify this advantage that your
competitor has. Don’t get me wrong, you don’t need to become better than them at this particular thing, just
good enough that, given your rockin’ points of difference in other areas, your customers will still choose you
over them. For example:
I could go to Armadillo Grill for Mexican food for lunch today or I could go to Baja Burrito.  The ambiance
sucks in both places. The food is a bit better at Armadillo Grill, and the salsa is definitely better. If a bunch of

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other people agree with me, and start going to Armadillo Grill instead of Baja Burrito, the nice folks at Baja
might have to consider improving their food and salsa so that they are can achieve parity with Armadillo Grill.

The Baja folks have a pretty sweet point of difference against Armadillo Grill– they are right across the street
from NC State campus, in walking distance from the dorms. Their location is a great point of difference, but
they could probably be doing even better business if they achieved parity with Armadillo Grill on their salsa.
OK, now I’m hungry. Who wants Mexican?

So why do you need to think through your points of parity and points of difference? You’ll find that if you
know where your brand value proposition is strong and you know where it is weak (and your competitors are
strong), it becomes pretty easy to craft a solid brand strategy.

Shore up the weak spots. Make your differentiators clear. Rinse, and repeat regularly so you can be sure you are
keeping one eye on the competitive threats to your brand position at all times.

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