Points of Differentiation and Parity: A Balancing Act

In class this week, we had a lot of discussion about points of differentiation and points of parity. Differentiation is often thought of as the "typical" key to achieving a competitive advantage. However, there is a lot of debate about whether or not differentiation is actually the key to a company's success. It's interesting that we have been discussing this in Marketing Seminar, because in my Business Strategy course we've also been talking about different business strategies and how they yield a competitive advantage. After all of this discussion on the topic, I've come to the realization that businesses must be able to balance points of difference as well as points of parity in order to succeed in today's marketplace. 

One of the articles we had to read for this week was called Three Questions You Need to Ask About Your Brand, by Kevin Lane Keller, Brian Sternthal, and Alice Tybout. This article opened my eyes to the fact that brands really need both differentiation and parity to succeed. Prior to all of these discussions, I always thought that to succeed in the marketplace, you need to have an extremely unique idea- something that no one's thought of before. Think about it, shows like Shark Tank are all about entrepreneurship and coming up with that "genius" idea that will make someone's life so much easier. But, is it really about that? Is coming up with some unheard of product going to create a large profit and business success? After reading this article and discussing it in class, I'm going to have to say no.

In the article, the authors say "conventional wisdom says creating a brand is about differentiating your product. Think again" (81). I thought it was interesting how the word conventional was used, because I do agree that this is the conventional way of thinking. Why would a brand want to enter a market where there are a lot of fierce competitors already? I think the answer is this: consumers buy products they are familiar with. Imagine not only having to create brand awareness and recognition, but having to completely educate consumers on your new product innovation. Personally, I'm the kind of person who isn't fond of change. I stick to products and services I'm comfortable with and fully understand. I'm the kind of consumer that takes some convincing to try a new product. So, how can brands use this to their advantage? They need to figure out what industry they want to enter, and thoroughly investigate their competition.

The article also gave a great example about Motorola failing to launch a new product into the marketplace back in 1994. They created the "Envoy", a personal digital assistant that was supposed to act similarly to a pager. However, this product failed because it "lacked sufficient points of parity to belong to any existing category. Without a clear frame of reference, consumers weren't sure why they should purchase the product" (82).  This example shows how consumers aren't always likely to go outside of their comfort zone.  By understanding an industry and why competitors are succeeding, I think that companies can generate ideas on their product ideas and how they can market them in a way that makes sense to consumers.

The authors suggest that brands ask themselves two important questions when determining whether or not their points of difference are sufficient: "Are they desirable to customers, and can you deliver them?". When you have some genius idea you need to make sure that it is one that customers need and want, and that you're able to follow through with them.

Overall, I thought this article was really interesting and it opened my eyes to the "dangers" of differentiation. It isn't all about being 100% unique in today's marketplace, and brands need to understand that. Being the best doesn't necessarily mean being different or being similar, it takes a balancing act of the two.