A New York Times article (It’s Brand New, but Make It Sound Familiar) discussed the importance of picking the right product category when it comes to marketing and introducing products.
This was Ironic, as I saw the story right after a client PR kickoff meeting in which we spent much time debating the appropriate category for the client’s tech. The client does indeed have a unique offering, and wanted to forge a new category to describe what they do and help develop the market for it.
It was a very lively discussion, and we were privileged to hear the views and war stories of the client management team, serial entrepreneurs with long track records involving some of the most well-known enterprise tech brands. They brought up the names and work of Al Ries and Jack Trout, marketing geniuses who pretty much wrote the book on product positioning.
As the NY Times article said:
Humans instinctively sort and classify things. It’s how we make sense of a complex world. So when companies develop innovative products and services that don’t obviously fit into established categories, managers need to help people understand what comparison to make. Without that step, potential customers might just walk away wondering, “What is it?”
As a starting point, it helps to understand some basic traits of behavior. When people encounter something they don’t recognize, they make sense of it by associating it with something familiar.
“What category you place something in has a huge influence on how you view its basic properties,” says Arthur Markman, a professor of psychology at the University of Texas in Austin. “The category signals not only a set of features to expect, but at a more basic level, when and how you should use the novel item.”
Problems can arise if consumers can’t place innovations into familiar categories.
So, what do you do if you are a company with a product that doesn’t neatly fit into an existing category? The question is complicated by the fact that most people only recall a limited number of competitors for a given space, with one name typically occupying the leadership position. In their book Positioning: The Battle for your Mind, Ries and Trout talk about the importance of owning your category, or at least occupying the leadership position.
I offer three possibilities below, with advantages and disadvantages of each, and cite examples from the world of tech.
Option #1: Position your product within an existing category
Advantages – Less education will be needed than if you are trying to establish a new category.
Disadvantages – You may need to deal with any baggage the category has, and justify the need for a new entrant in an established space. It will be harder to convincingly position a new player as a leading one in an existing playing field. Also, this would not make sense if the product truly is a first of its kind.
Option #2 – Invent a new Category
Advantages – Doing this will make it easier to be the brand leader because you are defining the category.
Disadvantages – It will take time and effort to establish and educate about the new category. Since it won’t neatly map to established reporter beats and analyst coverage areas, it might be hard to determine who the right influencers are, and to get them to care.
An example of a company that did this successfully was Cisco – before they called their devices routers, PCs and servers handled the task of routing Internet traffic.
Option #3 – Modify an existing category
A good middle ground could be to modify an existing category. DEC did this when they introduced the minicomputer. This helped them carve out a leadership position for their subcategory, amidst the larger world of computers, which had been dominated by IBM at the time.
The caveat is that people will not necessarily buy into your attempts to engineer positions and categories. The more explaining you need to do, the harder it will be to get people on board. People will call it as they see it and might dismiss your efforts as marketing opportunism.
For further reading on product categories and positioning, you might want to see my earlier posts: