When “Just as Good” is Better for Brands

Many brand strategists’ strive to develop points of differentiation that drive brand preference among consumers. The key to winning is assumed to be differentiation; however, your brand won’t even be considered if it’s considered to inadequately deliver on a key must-have dimension. You will not be a player – which means you have no chance of winning – no matter how compelling your point of differentiation is.

The solution is the point-of-parity concept, which was introduced to the branding world in Kevin Keller’s book, “The Principle of Positioning.” It’s defined: 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 competitor’s claimed best). While POPs may usually not be the reason to choose a brand, their absence can certainly be a reason to drop a brand. The solution is to change a liability into a point of parity, meaning the brand is “good enough” at the dimension, that it’s no longer excluded from consideration. The points-of-parity concept is another perspective on how to make or keep a brand relevant. There are two points of parity types: category and competitive.

Category Point-of-Parity

A category point-of-parity means that a brand offers perceived necessary category features. For example, nowadays a consumer is likely to look over a bank or credit union that doesn’t offer a convenient and secure mobile deposit feature. In another example, German auto manufacturers resisted adding cup holders to their automobiles as they insisted vehicles are “driving machines, not open beverage carriers.” Eventually, cup holders became a must-have for many and the German auto manufacturers were forced to incorporate the feature.

“The solution is to change a liability into a point of parity, meaning the brand is “good enough” at the dimension, that it’s no longer excluded from consideration.”

The Jaguar brand lacked four-wheel-drive vehicles Jaguar executives saw their brand being perceived as irrelevant by those who wanted four-wheel drive. When the group of four-wheel-drive buyers grew to 50 percent of the purchasers in their top geographic markets, Jaguar introduced an all-wheel-drive model. The vehicles they introduced weren’t intended to be seen as superior to the Audi Quattro and similar models, but rather good enough that most buyers wouldn’t exclude Jaguar from consideration.

Competitive Point-of-Parity

A competitive point-of-parity is designed to negate a competitor’s point of differentiation. A common brand problem is when buyers perceive a competitor to have better product quality. Hyundai had a significant quality issue In the 1990s, Hyundai made cars that were overwhelmingly considered to be of inferior quality to other vehicles in the market. After fixing the quality problem in the early 2000s, consumers still shunned the brand. It took years, but through a variety of programs and communication channels, Hyundai found ways to communicate the new quality levels and gained quality parity. Their quality was perceived to be good enough that attention could turn to points of difference such as price, styling, gas mileage and warranty.

McDonald’s Loses Swells of Customers to the Competition

Mcdonald’s had a competitive parity problem when it lost customers who were concerned about the nutritional quality of their foods. Instead of giving any consideration, they began to veto the brand and purchase healthier alternatives. To respond, Mcdonald’s began offering grilled chicken sandwiches, a variety of salads, fruit smoothies, apple wedges for Happy Meals and reengineered their signature fry recipe dramatically reducing the “bad” fat. The goal was not to make McDonald’s a destination for the healthy-eating segment but to create enough parity so that the number who wouldn’t even consider the brand was reduced.

Unfortunately, that wasn’t the end of the problems McDonald’s needed to solve. Starbuck’s success presented a serious threat to McDonald’s breakfast and off-hours business. The brand saw this challenge as an opportunity. The advent of McCafé in 2007, with a line that included cappuccinos and lattés, changed the competitive landscape. McDonald’s didn’t aspire to be better than Starbucks; the goal was to just provide a close enough experience to Starbucks that they’d create a point-of-parity with respect to quality. As a result, a segment of Starbucks consumer base started to include McDonald’s in their consideration set.