Tuesday, March 20, 2012

Brand growth requires changing the game not just playing it

Sometimes when I am faced with a problem, I can only see it from one viewpoint. The result is that I get stuck and can’t figure out how to solve the problem.

I was reminded of this the other day when a group of us were discussing how best to grow the financial value of a brand. Because we tend to think about a brand’s status in the context of its product category, we often forget that the biggest opportunity for growth may exist outside the current definition of that category.

In spite of the fact that most of our efforts as marketers and researchers are focused on growing market share, the evidence suggests that fighting for share within an existing product category is likely to be a long hard battle, with little prospect of victory.

In most established product categories in developed economies, brand market shares change very little from one year to the next. Any action is likely to be countered by the competition resulting in a stalemate. It is not that you can afford to ignore the share fight, because if you don’t fight, you risk losing share. But equally, there is a distinct risk that overly aggressive competition will result in unprofitable share fights and price wars.

So what should a brand do to generate growth? In many cases, this requires stepping back from the current situation and looking at it from a different viewpoint. How can you best change the game to your brand’s advantage? This requires finding ways to change the way customers think about the category, not fighting for share within the category.

I think there are three basic ways a brand can change the brand game to its advantage:

Expand the category
Disrupt the category
Exceed the category
Brands expand the category when they find new ways to make their category relevant to consumers. By effectively communicating a new use, the brand will gain a temporary advantage over the competition. The challenge is to ensure that the brand is strongly associated with the new usage before other brands copy it.

Brands disrupt the category status quo when they come up with new, meaningfully different innovation. Real innovation challenges people’s existing perceptions of the category and gives them pause for thought. Often, the innovation is simply adding a new level of benefit, e.g. Colgate Total promised 12 hour fresh breath protection. Adding the anti-bacterial and copolymer required charging more for the new product versus standard Colgate, but many people perceived it was worth paying a premium for the added benefit.

Finally, exceeding the category means meeting the same need but with radically better delivery. When Apple first launched the iPod, it changed the way people thought about personal music players. The iPod met the same need as the Sony Walkman, but did so in a far better way. Similarly, people switched from Blockbuster to Netflix because it was far more convenient to get a DVD through the mail than have to go to the store.

So what do you think? Do these three ways of escaping the share fight make sense to you? Are there other ways a brand might transcend its category? Please share your thoughts.

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