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Point of difference refers to the factors of goods or services that establish differentiation. Differentiation is the way in which the goods or services of a company differ from its competitors. The indicators of the point of difference’s successfulness would be how can the goods or services provide benefits to consumers, and having the consumers positively and strongly associate with the particular brand instead of other brands within the competing industry. However, an excessive degree of differentiation would cause the goods or services losing its standard within a given industry, and, it would result in losing consumers. Hence, a balance of differentiation and association is required, and point of parity has to be adopted in order to allow a business to remain or further enhance its competitiveness.

Significance of Differentiation

Being Able to Stand Out from Its Competitors By differentiating itself from other competitors within an industry, it would allow a business to have greater potential income. It is because having differentiated goods or services would limit the choices of consumers, which drive them to purchase goods or services from a particular company. In addition to that, the threats brought by competitors would be lowered significantly, which means, by adopting differentiation strategy, it would allow businesses to be more competitive and be able to have a greater source of income.

Effects on Brand Loyalty As the choices of consumers would be lowered significantly from differentiation strategy, consumers are unlikely to accept other variations without being convinced. Which means, it drives the consumers to lean towards a particular company, and establish a better relationship with the company. Thus, businesses would be able to take advantage from brand loyalty and further enhance the competitiveness.

The Relationship Between Point of Difference and Point of Parity

Point of Parity Point of parity refers to the way in which a company’s product offers similarity with its competitors within an industry. It could also be known as the elements that are considered mandatory for a brand to be recognized as a legitimate competitor within a given industry.

The Importance of Adopting Point of Parity As an excessive degree of differentiation would cause the goods or services losing its standard, but not having differentiation would not benefit businesses as well. Therefore, in order to avoid excessive differentiation, adopting point of parity would be the solution. In terms of offering similarities, businesses should look at the benefits and all the positive features of the competitor’s product, and take advantage from it. At the same time, businesses could work on the negative aspects or even further enhance the positive features of the particular product in order to achieve differentiation, and to take advantage from it. Therefore, finding a balance between point of difference and point of parity is a critical factor for businesses to succeed.

Variety of Differentiations

Product Differentiation In order to achieve product differentiation, that particular product needs to have other unique features and stands out from its rivalries’ product, or, by entering a new industry, that particular product would then become the only product that offers certain features to consumers. Achieving product differentiation is one of the ways for businesses to become the market leader, and would allow them to take advantage from it. However, if the product differentiation were too radical, it would lead to consumers fearing to accept the new product, where it might not meet the standards of what the consumers are looking for, or it could be quickly obsolete.

Price Differentiation Price differentiation is where a business offers a different price (lower or higher) from the industry’s standard or its competitors. By offering a lower price, it would attract consumers to purchase, as their demand is likely to be higher, when the price is lower. In terms of offering a higher price, it also has the effect of drawing the attention from consumers, as consumers would wonder the reason behind it, and higher price product tends to be more appealing to the upper class group. However, in order to take advantage from offering a higher price, the quality of the product has to match the price, otherwise, consumers would lose interests because of not getting what they pay for.

Differentiation Focus The principles of differentiation focus are similar to all the other differentiation strategies, where it differentiates some of the features from the competitors. However, differentiation focus targets a particular segment within a market, where it allows businesses to focus on their strength. Thus, the user experience of the particular segment would be better, as all the marketing and pre-production work of the goods or services are focused on specific segment.

Case Studies

Apple's Mac OS System The Mac OS System that Apple offers would be a great example of a successful differentiation strategy. Regarding the product differentiation, the Mac OS System offers a variety of features and advantages that Windows PC does not have. For example, MacBook does run faster in the SSD drives and flash storage through the use of PCIe connections, as opposed to the majority of premium PCs, where SATA is being used instead. Additionally, the Mac OS System has a better security system in terms of preventing users away from being attacked by virus, where for Windows PCs, users are more likely to suffer from virus attack. Also, MacBook comes with excellent software included, for example, iMovie, GarageBand and FaceTime, which allows users to have a better user experience. Thus, Apple is able to stand out from its competitors with its unique features through product differentiation strategy, as well as being able to take advantage from using premium-pricing strategy as their price differentiation.

See also

(Marketing) )Points-of-parity/points-of-difference/POINT-OF-DIFFERENTIATION)

References

This article includes a list of references, related reading, or external links, but its sources remain unclear because it lacks inline citations. Please help improve this article by introducing more precise citations. (July 2013) (Learn how and when to remove this message)

• Krotz, Joanna L.; John Pierce; Ben Ryan (September 22, 2004). "Focusing on Your Point of Difference (POD)". Microsoft Small Business Kit. Redmond, Washington: Microsoft Press. ISBN 0-7356-2054-7.

• D'Souza, Sean. "The Fundamental Flaw in Creating Your Uniqueness (USP)". Retrieved 2007-01-30.

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1. Grams, Chris. 'Brand Positioning Tip #1: Points Of Parity And Points Of Difference'. Dark Matter Matters. N.p., 2009. Web. 27 Oct. 2015.
2. Process, The, and What Process?. 'Points-Of-Difference (POD)'. Segmentationstudyguide.com. N.p., 2015. Web. 27 Oct. 2015.

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