Point of difference

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. Indicators of the point of difference’s success would be increased customer benefit and brand loyalty. However, an excessive degree of differentiation could cause the goods or services to lose their standard within a given industry, leading to a subsequent loss of consumers. Hence, a balance of differentiation and association is required, and a point of parity has to be adopted in order to allow a business to remain or further enhance its competitiveness.

By differentiating itself from competitors, a business might have greater potential income. Because having differentiated goods or services limits 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.

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.

Points of difference and points of parity are both utilized in the positioning of a brand for competitive advantage via brand/product.

Points-of-difference (PODs) – Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competing brand i.e. points where you are claiming superiority or exclusiveness over other products in the category.

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 competitors 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.

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Wikipedia