Posted in Marketing and Strategy Terms, Total Reads: 1333
Definition: Parity Products
Parity products fall in the category of products where several brands offer products which are similar to each other & possess functionally same attributes. This makes one brand easily substitute by some other brand.
The presence of parity products in a category means that a consumer has more than one option to choose from & thus there is very less chances of a monopoly. A firm making parity product cannot command premium pricing because of the presence of competitor’s products which can easily substitute their offering. If a firm raises its prices, the consumers will buy less of that brand & will switch to the other brand as both the brand provide almost similar offering.
The advertisements are important aspects of parity products through which one tries to differentiate their product. The products following in this category are mostly the products that you use in Kitchen or Bathroom. For example Toothpastes, shampoos, soaps, detergents etc have variety of parity products as each brand in these product categories are essentially similar & offer identical benefits.