Establishing points of parity

Common misunderstanding about positioning

• It should focus almost exclusively on differentiators

2

Volvo(Safety)

Crest (Cavity protection)

Reality about positioning

• Differentiators alone are not sufficient

• Points of parity are the minimum requirements needed to compete in a given category and can be just as important to your success as differentiators

3

Minimum requirements exist for every category

Hair salons

• Qualified staff

• Hair styling

• Hair coloring

• Friendly atmosphere

• Convenient hours/location

• Manicures/pedicures

• Waxing

Commercial Banks

• Service performance

• Checking accounts

• Savings accounts

• Debit/credit cards

• Online banking

• Loans and mortgages

• Wire transfers

4

Communicating points of parity

And the Subway sandwich chain is a case in point

• Company thrust into national spotlight after college student Jared Fogle loses 240 lbs by eating a steady diet of its sandwiches

• Subway hired Jared as a national spokesman for its brand

• Hundreds of news stories and talk show appearances ensued positioning Subway as the healthy fast food option

• Sales exploded but Subway’s ranking on taste, the primary decision driver for fast food, began to decline

6

To address this issue Subway launched a two-pronged promotional campaign

• Subway reinforces its great taste by promoting its most flavorful sandwiches in one campaign

7

• It promotes its most compelling point of difference, its healthiness, through a separate campaign leveraging Jared and professional athletes

The combination has been very effective

• Subway surpassed McDonalds in 2010 to become the largest global restaurant chain

• Subway growth* more than doubled the industry average from 2007-2013

• Subway has become the 3rd most valuable fast food brand behind McDonalds and Starbucks according to the 2013 Forbes survey

8* Average growth in the number of Subway franchises from 2007-2013

Points of parity are particularly important to establish for new brands and line extensions

The right way

• Nivea extends into deodorants

• Brand promise– Gentle & protective

• Focuses on two messages– 24 hour protection– Gentle & protective

• Outcome– Nivea establishes presence in

deodorant category

The wrong way

• Dove extends into dish washing liquid category

• Brand promise– Moisturizing

• Focuses on one message– Softens hands while you do the dishes

• Outcome– Dove fails to gain acceptance and exits

market

9

Points of parity change over time

Short history of the shaving market

11

Enter King Gillette

• Straight razors required continuous sharpening

• His disposable blades eliminated the task of sharpening

• Pioneers new business model for disposable products

• Launches continuous stream of innovations

King Camp Gillette1855 - 1932

Gillette Blue Blade1902-1938

WilkinsonStainless Steel blades

1962

WilkinsonPlastic shaver

1970

Gillette Aristocrat1934

Gillette Adjustable1958

Gillette Trac IIDouble blade razor

1971

Gillette SensorSpring loaded blades

1990

Gillette Atra Pivoting Head

1977

Evolution of razor requirements

Gillette Sensor for Women

1992

Gillette Sensor 33 blades

1995

Gillette Mach 3Anti-friction blades

1998

Schick Quattro4 blades

2002

Gillette M3 PowerVibrating razor

2002

Gillette Fusion5 blades

2006

Gillette FusionPro Glide Flexball

2014

Evolution of razor requirements, ctd.

Examples of one-time differentiators that became minimum requirements

• Fluoride toothpaste

• Antiperspirant

• Cup holders in automobiles

• Anti-lock brakes

• Next-day package delivery

• Made to order computers

• Low calorie drinks

• Online banking

• 6-hour laptop batteries

• Frequent flier programs

• Platinum credit cards

• DVRs with skip forward feature

• Cell phone cameras

• Cell phones w/ web browsers

15

Summary

• One of the most common misperceptions about positioning is that it should focus almost exclusively on differentiators

• Points of parity are the minimum requirements to compete in a given category and they can be just as important as differentiators

• Points of parity must be communicated repeatedly to prospects in order to maximize receptivity to your offer

• Points of parity are always evolving so brands need to keep pace and when necessary develop new sources of differentiation

16