Why is it important for businesses to achieve points of parity in the market?

• A. To ensure their products or services meet the basic expectations of consumers compared to competitors
• B. To guarantee that their products are always priced lower than all competitors
• C. To eliminate all forms of competition in the market
• D. To maximize government intervention in their industry

Answer: (A)

Verified step by step guidance

1. Understand the concept of 'points of parity' in marketing and microeconomics: these are attributes or benefits that a product or service must have to be considered a legitimate competitor in a market segment.
2. Recognize that achieving points of parity means meeting the basic expectations that consumers have for a product category, ensuring the product is not seen as inferior or lacking compared to competitors.
3. Analyze why meeting these basic expectations is crucial: it allows a business to compete effectively by establishing a baseline level of quality or features that customers expect.
4. Consider the implications of not achieving points of parity: the product may be rejected by consumers because it does not fulfill essential needs or standards, leading to loss of market share.
5. Conclude that the primary importance of achieving points of parity is to ensure products or services meet consumer expectations relative to competitors, rather than focusing solely on pricing, eliminating competition, or influencing government intervention.