Points of Parity and Consumer’s Brand Preference

Most brand strategists focus on developing points of difference that will give consumers good reasons to prefer their brand. The key to winning is assumed to be differentiation.

Points of Parity vs Points of Differentiation: What’s the Difference?

Points of differentiation is a phrase used to describe the areas where brands differentiate themselves from others. Many strategists believe that this is the way to come out on top in terms of brand preference.

On the other hand, we also have points of parity. Points of parity are elements that a brand needs in order to be considered in the eyes of the consumer. This is where a brand may have similarities to others—leading consumers to believe that brand is “good enough” to be included in the conversation.

If there is a must-have dimension on which your brand is perceived to inadequately deliver, your brand will not be considered. You will not be a player, which means you have no chance of winning—no matter how compelling your point of differentiation is. It will not compensate for a fatal liability.

The solution? Change that liability into a point of parity (POP). In other words, change that liability so that on that dimension the brand is good enough to no longer exclude it from the conversation. The point of parity concept provides another perspective on how to make or keep a brand relevant. In this post, I’ll discuss two different points of parity you should consider experimenting with.

Category Points of Parity

A category point of parity means that the brand offers necessary category features. A bank will not be suitable, for example, unless it offers adequate ATM service. At first, some German car manufacturers resisted adding cup holders, believing that car purists would not want such distractions in their cars. But this became a “must-have” for many and they eventually had to add them.

Jaguar executives saw their brand as being irrelevant to those that wanted four-wheel drive. When that group hit 50 percent of purchases in their top geographic markets, Jaguar introduced an all-wheel-drive model. These vehicles were intended not to be superior to others but rather good enough to eliminate, for most buyers, the reason to exclude Jaguar from consideration.

“Change that liability so that on that dimension the brand is good enough to no longer exclude it from the conversation.”

Competitive Points of Parity

A competitive point of parity is designed to negate a competitor’s point of difference. A common brand problem is when the quality of the offering is not adequate in comparison to the competition. In the 90s, Hyundai made inferior quality cars. But even in 2000, after fixing their quality problem, people still shunned the brand because of the bad quality perception. It took years, but through a variety of programs and communication channels, Hyundai found ways to communicate their increased 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.

Case in Point: McDonalds

McDonald’s had a competitive parity problem when it began losing customers concerned with healthy eating. They were vetoing the brand altogether. So, they began to offer grilled chicken sandwiches, a variety of salads, fruit smoothies, a choice of apples in the kids’ Happy Meals and started making their signature fries with dramatically reduced “bad” fat. The goal was not to make McDonald’s a destination for the healthy-eating segment but to create enough parity to reduce the number of customers who wouldn’t even consider the brand.

They then ran into another competitive parity problem. The success of Starbucks was a serious threat to their breakfast and other off-hours business. But it was also an opportunity. The advent of McCafé in 2007, with a line that included cappuccinos and lattés, changed the competitive landscape. McDonald’s was not aspiring to be better than Starbucks; the goal was to be close enough to the Starbucks experience to create a point of parity with respect to quality. The result was that a segment of the Starbucks base started to include McDonald’s in their consideration set.