Why points of parity is important? Explain.

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Points of parity are the attributes or benefits that can be associated with the product or service of the
brand but are not necessarily unique and can even be shared with other similar/ competitor brands in
the market or industry. The points of parity come in many forms such as categorical, correlational, or
competitive. Points of Parity are crucial for brands in strengthening the competitive position of the
brand in the respective industries. For example, Consumers expectation from a soap brand is to remove
dirt from their hands. If the brand fails to do so it will not be considered as a soap by the brand even if it
comes from a multinational company of good reputation like Unilever. The next step after accurately
segmenting and targeting the right consumers for the brand, marketers need to fix the competitive
framework for the brand. In other words, brand needs to craft their positioning in an effective way to
make the segmenting and targeting process useful. Defining appropriate points of parity and points of
differences of the brand plays an important role in this process. Points of parity may not highlight the
unique features of the brand but this also ensures the mandatory features of a product or services of
the brand that must be present to even become qualify to compete with the competitors of that
particular industry. The core important contributions of points of parity are given below:

Points of Parity Ensures Credibility of the Brand:

The points of parity are seen as mandatory benefits that customers expect from a brand. These benefits
or attributes seen s compulsory by the customers are essential for increasing the credibility of the
product or service among its competitors. The points of parity are necessary features of a products or
service but are not necessarily unique or even sufficient. For example, food delivery companies like
Foodpanda or Pathao Foods will not even considered as a good delivery agents by the target consumers
if they are not able to deliver the ordered food correctly within time.

Points of Parity Prepares the Brand for Gaining Competitive Advantage:

Points of parity are often designed in a way to enable the brand to become eligible in competing with
their competitors. Points of parity give the brand the opportunity to identify their weaknesses by
comparing themselves with the industry standards and competitor products or services. It enable the
brand to overcome these observed weaknesses and prepare themselves in competition with other key
players in the market.

Give one Bangladeshi brand example of the following pricing strategies and explain why they are
following the strategy. (a) Everyday Low pricing, (b) High-low pricing, (c) Market skimming pricing, (d)
Market penetration pricing, and (e) Captive product pricing.

Bangladeshi brands following the given price strategies described below

1. Everyday Low Pricing:

Everyday low pricing is charging a constant everyday low with few or no temporary discounts. For
example, Chaldal offers everyday low prices on eggs in comparison to the competitors of the free
markets of the country. Chaldal utilizes the text marketing strategy to inform target consumer about
these discounts. The consumers order the eggs and other necessary grocery items on discount from
Chaldal rather than purchasing them from local retailer at full price. Food delivery agent “Food-Panda”
also provides a discount of 40 taka on each order from any given restaurant. If the consumer chooses to
dine physically at the selected restaurant then he/she may not get that 40 taka discount but ordering
from that restaurant through food-panda will give consumers that discount.

2. High Low Pricing:

High low pricing means charging higher prices on a regular basis but running frequent promotions or
discounts to lower prices on selective products with the purpose of increasing revenues to secure
crowd-traffic, create low-price image, or attract customer who may not buy those products in full prices.
Aarong, a leading clothing brand of Bangladesh provides discounts every year on selective items of the
brand. These discounts are often arranged before the Eid festivities start in the country or at the year
end. The purpose of these types of sales by the top clothing brand of Bangladesh is to clear their
inventory of products that were left even after the festive season is done. It attracts consumer who buy
from other clothing brands in normal time when Aarong is selling products at a full price. It also enables
Aaring to retain a section of their target consumers and sustain their brand value.

3. Market Skimming Pricing:

A pricing strategy of getting high initial prices to “skim” revenue layers from the market is called Market
skimming pricing. Key factors in implementing this pricing strategy are that product quality supports that
high price of the product, competitor cannot enter the market easily and consumer are willing to pay
the high price for the product. Igloo is a top ice-cream manufacturing company of Bangladesh. When
Igloo launched the “Exotic Choc-bar Ice-cream” in the market, it was priced higher than regular ice-
creams of the same category. These ice-creams were priced at 65 taka each while regular choc-bar ice-
creams were priced at 15-20 taka. Although being priced at a higher price, the ice-cream products were
liked by the consumers as the food products tastes good. So, consumers were willing to pay the initial
higher pricing during the launch as the product justified the price.

4. Market Penetration Pricing:

The market penetration price strategy sets a low initial price in order to penetrate the market quickly to
attract a large number of consumers and quickly gain market share. E-commerce site E-valy is the key
example of market penetration pricing but the company also faced legal troubles due to their excessive
low price of products and late deliveries. Another key example of market penetration pricing is RFL
products. The RFL plastic products were priced at a reasonable low price during their launch and still sol
at a lower price than competitors. This strategy enables RFL to grab a big share at the plastic goods
market and compete with foreign brands. The home goods sold by RFL are priced at a highly lower rate
than the other competitors in the market.

5. Captive Product Pricing:

Captive Product pricing includes the pricing strategies of the product or products that must be used
along with the main product. Unilever is one of the top consumer goods manufacturing company in
Bangladesh. One of the key brands of Unilever in Bangladesh is “Pure it” water Purifier. Water purifier
has got good response in the Bangladesh market and gained a good consumer base. However, the
nature of the water purifier machine is that the instrument that purifies the dirt from the water has to
be changed within 6 months. In this scenario, the consumer has to purchase the purifying instrument
from the superstores at 250- 450 taka depending on the size of the purifier. Unilever also provides free
service of installing the instrument correctly after purchasing it if the consumer calls for the service using
the helpline.

How countries are doing business internationally using their positioning? Explain with example

Risks of Crowdsourcing:

Crowdsourcing is a strategy that many companies have now adopted to develop new ideas or new
products through open-innovation programs. This is a process of involving a wide group of people, not
necessarily directly associated with the brand, inviting broad group of communities of people such as
customers, employees, independent scientists and researchers and even public at large to the
innovation process. Although the advantages of crowdsourcing ranges from getting a wide variety of
ideas to directly gather information of the consumer needs, It also comes with a number of risks and
disadvantages which are given below:

 Crowd-sourcing hampers the secrecy of the company as the vision or purpose of the company is
declared to a large group of people.
 It increases the vulnerability of the brand to the target consumer.
 Crowd-sourcing cannot be considered as a reliable and accurate source of ideas due its setting.
 While getting a variety of opinions, ideas, and strategies can be beneficial it can also hamper the
implementation as too many people are involved with the idea and no single vision is being
implemented.
 Crowd sourcing also creates uncertainty about implementation of the product, idea or program
as these are not often considered as a reliable source of strategy to invest.

Suppose you are the owner of the brand - Mimi chocolate and your product is in decline stage. What will
be your strategy now? Why? Justify

Decline is the last stage in the product life cycle that companies try to prevent and extend their stay in
the growth or maturity stage. But often many companies reach to the decline stage with one of their
products were sales fall off and profits drop. MIMI chocolate is one such Bangladeshi product that has
reached the decline stage. My strategy for this product is given below:

Re-Branding:

My first strategy will be to re-brand the product. Invest in developing the product, recruit individual
experienced in the R&D department to improve the product, change the packaging and make it more
attractive to the current consumers. Designing new strategies to compete with foreign brand that are
attracting the target consumers such as providing free toys or stickers to attract school going kids will
also improve the product’s image in the market.

Accept the Decline of the Product and Discontinue the Production:

Considering that there are fewer chances of getting investments and funding for re-branding a product
that has already reached decline stage and the target consumer of the product in its growth stage has
reached an age where they do not even consume chocolate that much, it will be too risky and costly to
invest time, energy and money in such a product. So, if funding is not available, or after conducting test
marketing it is proved that even after re-branding the MIMI chocolate brand cannot sustain tough
competition from the saturated market of Bangladesh, then I will accept the decline of the product and
stop further production of the product. This will save the cost of re-branding, planning, and designing
new packaging for the product as investing any more money in this product will be an added cost.

Gradually Decreasing the Production:

Another strategy that can be implemented is to rather than instantly stopping production gradually
decrease the production of the products. First step is to reduce the R&D cost and focus on generating
revenue from left products.

Differences between Consumer Market and Business Market Consumer Market Business Market are:

1. Consumer market refers to the market in which the buyers purchases goods for consumption. & In
business market, the buyers purchase goods for further production of goods and not for consumption.
2. Consumers are individuals only. Consumers are companies.

3. There are all types of customers like old people, young people, educated ones, uneducated ones,
students, salaried class and so on. There is no such classification as the majority of business consumers
are sophisticated ones.

4. Their purchasing behavior is dependent on current trends or fashion, income etc. Their purchasing
behavior is dependent on needs for products, relationship with seller, and economic impact of purchase
and so on.

5. Consumer market is big and scattered. Business market is small and concentrated. 6. Purchases made
by consumers are of small value.