Companies around the world compete against each other, aiming to provide the highest level of quality and efficiency to their customers.
Especially in crowded markets with several established players, brand authenticity and differentiation are strongly encouraged.
This article will discuss the negative effects of brand parity and how companies can avoid them through strategic marketing efforts.
What is brand parity?
Brand parity is a close similarity between brands within the same industry. In crowded markets, it can be difficult to differentiate one brand from another. Within these spaces, customers have difficulty telling the difference between brands, giving them the impression that the offerings of each brand are more or less the same.
Rather than having various brands with unique offerings within a market space, brand parity encourages consumers to look at a group of brands with equivalence. Consumers must select to purchase from brands under the impression that all alternative options offer about the same level of acceptable quality.
Brand parity is most common in mature segments with several established competitors. For instance, toothpaste brands are a commonly discussed example of product parity. Each toothpaste company aims to create a freshening product that successfully cleans teeth and prevents cavities, plaque build-up, yellowing, and more.
Because of these specific, shared goals, many toothpaste companies offer strikingly similar products that align with customer expectations for a hygiene product. They often employ a fresh, minty flavor and stick to cool colors such as blue and white to reflect freshness.
While brands like Colgate, ARM & HAMMER, and Aquafresh have all created high-quality products this way, there’s nothing distinguishing the benefits of each individual brand. This limits factors contributing to consumer choice and makes brand loyalty difficult to attain.
How does brand parity affect consumer perception of brands?
Brand parity has a significant effect on how consumers perceive brands within a mature market. Because of close similarities between the brands, consumers perceive products as equivalent and believe that they’re selecting from a group of indistinguishable brands rather than benefiting from the unique elements of individual branded products.
In these cases, consumers perceive products as the same. It no longer matters which brand they choose to buy from. They expect the same experience and level of quality from any and all of the established brand options.
For instance, few consumers would expect an entirely different tooth brushing experience if they select a Colgate toothpaste instead of their usual ARM & HAMMER product. Because of this anticipated interchangeability, customers are less likely to develop a sense of loyalty for one brand over the other.
Without a loyal following or distinguishable brand characteristics, companies can only effectively set themselves apart from competitors via pricing. Customers who believe quality is consistent across product options are likely to use price as the primary factor in determining their purchasing decision.
With price as the core decision-making factor, quality and defining brand characteristics are ignored and become less important in the purchasing process. Consequences of brand parity aren’t generally favorable for companies, especially considering how parity affects consumer perceptions.
How is brand parity related to successful marketing efforts?
Brands that get stuck in a market that is complicated by brand parity often turn to marketing to alleviate the negative effects of parity. Defining and showcasing unique factors of a brand and its products through marketing efforts is how most brands break out of parity.
In marketing, combatting brand parity means evaluating how your product is better and different from competitors and leaning into those differences in brand messaging.
In the toothpaste market, which generally suffers from brand parity, some brands have been able to make themselves stand out from the crowd. Despite the assumed limited scope of opportunity in this niche, mature market, certain brands are opting to specialize further by catering to niche audiences within the market.
Many toothpaste brands in the market have claimed one marketable benefit to serve as a differentiator against competitors. The following companies functionally own their singular attribute to break up potential brand parity:
- Sensodyne uses the sensitive teeth attribute
- Colgate uses the whitening attribute
- Crest has uses the cavity-fighting attribute
Of course, there is some overlap between toothpaste companies asserting that their products promote whiter teeth, for instance, but brands can better position themselves in this crowded market by unofficially owning their marketable attributes. This way, it’s possible to form a loyal customer base and appear unique to prospective buyers.
Avoid Brand Parity By Making Marketing Material Unique
Brand parity starts with a saturated market of brands that appear to be selling similar products with the same benefits. It negatively impacts consumer perception of all brands involved and makes price the singular driving factor for purchases.
By engaging in smart marketing tactics early on, you can avoid ever being part of brand parity. Be sure to define the unique benefits of your products and keep those factors at the heart of your marketing strategy.
Companies that choose to distinguish themselves from the start won’t need to be worried about being entangled in a sea of similar brands and products.