Points of Parity and Points of Difference

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A Kahnesky
Manager, Denmark

Points of Parity and Points of Difference

While launching a new product into the market or an existing product into new markets, a firm has to plan on how it wishes to position the offering in the market vis--vis existing competitors. In order for the target audience to shift from existing competitor's products/services to the firm's product or service, the offering should include both:
- Common and necessary features of the existing competitor products (referred as Points of Parity or POPs), and
- Additional differentiating features that give the firm's offering a competitive edge (referred as Points of Difference or PODs).

Points of Parity, as a concept, was introduced by Kevin Lane Keller. They are the associations that aren't always unique to a brand but may be found with similar competitors' brands. In other words, POPs are industry-specific aspects of products/services which makes the firm's brand on par with (hence parity) other competitors' brands. Points of parity are considered to be the bare minimum necessities (fulfilling the Core needs) for competing or staying relevant in the market.
For example, an FMCG firm intending to launch a new soap ought to include the following Points of Parity in the product Fragrance, Cleansing properties, Lathering properties, and Aesthetic packaging.
Points of Parity help in transitioning a product or service from the Awareness set of the customer to their Consideration set.

There are three types of Points of Parity:
  1. CATEGORY POINTS OF PARITY: Associations which are essential for an offering in a particular product/service category.
  2. CORRELATIONAL POINTS OF PARITY: These are the potentially negative associations perceived by the customers, as a trade-off for the set of positive associations which the product/service has.
  3. COMPETITIVE POINTS OF PARITY: These associations are used to negate the points of difference in the competitor's offerings, i.e. the firm can identify the POPs required in their product/service by looking at the PODs of the competitors.
Points of Difference are associations unique to the firm's offering and help to provide a competitive edge to the firm. They help in differentiating the brand from the competitors. Marketing promotions typically highlight these associations in their message. A Unique Selling Proposition or an USP is a term often used interchangeably with PODs.
For example, an FMCG firm intending to launch a new soap might include any of the following Points of Difference, in addition to the POPs Moisturizing properties, Aesthetics of the soap bar, Herbal/Organic properties, Special/Exotic fragrances, etc.
Points of Difference help in transitioning the product/service from the Consideration set of the customer to their Decision set.

There are three main attributes associated with Points of Difference:
  1. DESIRABILITY: Customers must perceive these association to be relevant and desirable.
  2. DELIVERABILITY: The firm must have the capabilities and resources to deliver these associations profitably.
  3. DIFFERENTIATION: Customers must perceive these associations to be distinct and superior over competitors.
Due to the limitations in the capabilities and resources of the firm, it may be able to include only a few features in the product or service. Adding in too many Points of Parity could position the product/service as a "me too" offering, without any particular distinct features. On the other hand, adding too many Points of Difference could lead to missing out on some critical POPs, making the offering irrelevant to the needs of the target audience. Thus, marketers have to strike an optimal balance between the Points of Parity and Points of Difference included in the firm's offerings.
In the case of promotional campaigns, POPs should be included in the message but PODs should form the core of the message. It is also important to understand that customers can only remember a limited number of features. This again highlights the limitation on the number of features to be included in the firm's offering which necessitates a harmony between the POPs and PODs.

Situations that require a focus on Points of Parity:
  • The firm is a "me too" player in the market, trying to emulate the success of the market leader.
  • While entering a fast-growing market, a firm can use POPs to capture a large number of first-time users.
Situations that require a focus on Points of Difference:
  • Firm is a market leader and constantly needs to differentiate itself from the competition.
  • While entering a mature market, a firm can use the PODs as a unique selling point vis--vis the existing players.
  • If there exists a wide diversity of needs in the market, the firm can focus on PODs to target a niche segment.
  • If the firm already has multiple products/services in the market.
  • In a price-sensitive market, firms can focus on PODs to shift the emphasis from price, during decision making.
It's important for marketers to understand that over a period of time, certain of the Points of Difference are likely to convert convert into Points of Parity for the customers. For example, the front-facing (or Selfie) camera which was once a novelty or differentiating feature in the smartphones, has now become a bare necessity in current smartphones. Thus, it's vital for firms to constantly innovate and look for new PODs, in order to retain a competitive edge in the market.

⇒ Any thoughts on Points of Parity and Points of Difference and about the need to maintain a balance between them?

Keller, K. L., Sternthal, B. & Tybout, A. M. (2002) "Three Questions You Need to Ask About Your Brand", HBR, Sept. 2002 Issue
Aaker, D. (2016) "When "Just as Good" is Better for Brands", Prophet
Aaker, D. (2013), "Points of Parity and Consumer's Brand Preference", Prophet
Kotler, P. & Keller, K. L. (2016) "Marketing Management", pp. 300-305
Mixpanel (n.d.) "Points of Parity vs Points of Difference", Mixpanel
Market Segmentation Study Guide (n.d.) "Points-of-Difference and Points of Parity", Market Segmentation Study Guide


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