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Owning a New 'Market Space' or Product Category
In additon to all these important brand management functions, I suggest
searching for category-building options among your markets, products,
and targeted segments.
These brands built new 'market spaces' or product categories. They
aimed at newly-discovered needs in the market, or looked at old
needs in a fresh way.
Opportunity / New Category Created
Coffee Shops; bars
Premium coffee drinks in a social, fun place
Overnight & small package air express
Bookshops; Big Box Bookstores
Online book shopping; reading habits information
On-demand watch-when-you-want/what-you-want TV
Unreliable information; medication-only treatment model
Information therapy as a part of treatment
- If you create it, you own it. Creating a category or
niche means that, at first, you own it. While market development
and ramp-up costs can be high and time horizons long, owning it
means high eventual ROI. Once established your category-domninant
brand will likely have a high and profitable market share.
- Categories live in customers' minds. A product category
exists in the mind of a customer. Brand managers may describe
the category, and suggest ways to invent new ones, but how the
category is viewed depends on the customer and her needs, concerns,
and buying motives.
- Ignored customers. When looking for opportunities, search
for ignored customers. Someone in the advertising business told
me about the time when she would have to buy a full fare airplane
seat to get a package overnight from San Francisco to New York.
My own story recalls asking a clerk in a book store if I could
get fast delivery for a book gift, or if there were similar titles
he had in stock. The answers were 'no' and 'no'.
Ignoring customers and lost customers means not listening
to them in an organized way. Conducting 'voice of the customer'
research is a must..
- Well established competitors. Category-building opportunites
emerge when competitive players are seemingly immovable in the
"old category". Xerox in copiers, independent and big box book
stores, US Postal Service, Airborne Freight all come to mind as
well entrenched and sassy competitors when the category was changed
on them by innovators. Of course, many dominant players stay that
way, continuing to define and own their categories: Coke, Tide,
Heinz, Hershey, Wells Fargo, eBay.
- Asleep at the wheel. Whether an "old category" consists
of many players (book stores), or a few (airfreight), they may
become complacent, looking to the past, and have tunnel vision.
This can be a seedbed for opportunity for the innovator to redefine
the business, the products, and establish a new category and,
possibly, brand leadership within it.
Airfreight companies were blindsided by Fred Smith and FedEx
when they were caught tied to point-to-point and multiple hub
routing. FedEx created a new category -- inexpensive overnight
anytime -- by innovating a single Memphis-based hub-and-spoke
Steps for creating new categories.
Here are some proven methods to search for and create new categories:
- Make opportunity scanning an ongoing activity.
Basic principles include: 1)Keep an open hopper and an open mindset
for new opportunities: it promotes innovation within your organization.
2) Question and challenge your own brands. Look for opportunities
to redefine your current category and position your brand as the
leader in the newly defined category. Be creative. 3) Know your
customers; know the market. Opportunities emerge as you continually
listen to customers. Classic market research methods work well for
general tracking of customer satisfaction and oppenings for new
brands and categories: qualitative research such as depth interviews,
customer panels and photo ethnography are a few proven methods for
uncovering unmet needs. Surveys can be useful, but they must be
designed with opportunity scanning in mind. For example, our design
of opportunity scanning research focuses specifically on finding
current categories vulnerable to new brands, and new category creation.
- Position an existing brand within a 'new category' you create.
This new category might be a new use for your existing brand,
or a newly identified segment. The most famous example of "repositioning"
a current category is 7-Up. Through their customer research, they
knew that the monster category is soft drinks was colas, not clear
lemon-lime drinks. They redefined themselves and their category
by positioning themselves against colas when they announced, "
7-Up, the Un-cola."
- Invest in product research. R&D can be a starting point as many
great market-shaking ideas come straight from a lab. Have your
development team listen to customers along the way as ideas and
technologies are born.
Opportunity scanning research
At Power Decisions Group, we've found one research approach useful
to uncovering opportunities across many industries, from technology
to consumer products. In brief, it involves measuring customer attitudes
and beliefs across two fundamental dimensions: 1) Brand loyalty,
and 2)Category satisfaction. The Opportunity Matrix chart shows
the generic nature of opportunities either by entering an existing
category with a new brand, or modifying or creating a new category.
It can be used as a guide when assessing established categories.
Other measures include category importance, customer substitute-seeking,
and brand loyalty.
Marketing conversations are dominated by 'branding': building the
brand, defending the brand, brand essence, brand equity, etc.
The brand focus usually has the premise of an existing category,
a known battlefield where your brand is fighting it out with a slew
In additon to all these important brand management functions, I
suggest searching for category-building options among your markets,
products, and targeted segments. The Opportunity Matrix is but one
way to think about your markets and the strategies you might deploy
to build market share.
Think now about creating a new category; one that your team invents,
and one your new brand might own.
Solid strategic intelligence delivers better decisions. Tom Brown, founder of Power Decisions Group
, helps clients make important market, product, branding and market entry and repositioning decisions using his straight-forward Decision Pathway model and well-conceived marketing research to quickly move clients to decision points and be faster and smarter in the marketplace. An MBA from UC Berkeley-Haas, Tom counts among his clients many Fortune 500, and mid-sized companies in financial services, manufacturing, technology, and health care.
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