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Monday, March 19, 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.

Computer game controller

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:

  1. Expand the category
  2. Disrupt the category
  3. 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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This entry was posted on Monday, March 19, 2012 and is filed under Creative. You can leave a response.

5 Responses

  1. Monday, March 19, 2012

    Graham Staplehurst

    I like the concept of expand / disrupt / exceed.  But there are also cases for going outside the category.  Apple took the iPod and turned it into the iPhone.  Brand extension is also considered less than it could be.

  2. Monday, March 19, 2012

    Dave C

    20 years ago, I remember listening to an ad agency creative speak about how he briefed his teams.  He always tried to keep it simple - it was either a problem of type a or type b.  One of the categorisations he used was 'are we trying to grow brand share, or trying to grow the market?'

    He didn't refine it down to HOW you might grow the market, but I like the way he routinely asked the question!  Boxed-up out-of-the-box thinking...

  3. Monday, March 19, 2012

    Drew

    This discussion is reminiscent of the Blue Ocean Strategy concept (a brief overview of which can be found here: http://www.blueoceanstrategy.com/downloads/bos_web.pdf), with the idea of transcending competition by creating new frontiers.  It’s a very powerful way of thinking by considering what actually adds value to the target market versus what competitors currently “think” is important.  In the document at the link above slide 5 shows a curve demonstrating Yellow Tail’s way of thinking about the wine market.  They were not trying to compete with premium wines but rather budget wines that in the past tried to be everything premium wines were but to a lesser degree.  Yellow Tail, instead of focusing on the complexities of the wine industry, took a simplistic approach centering on ease of selection and drinking, making a more “fun” brand than other budget wines.  The result was huge growth for the brand by creating a new archetype in the wine market.

    As researchers, we often look at derived importance for a category, which is limited to a list of predefined statements.  While this can provide useful insights about what differentiates brands versus what attributes are just cost of entry, it really needs to be taken to a different level.  Instead of just looking at what’s important to consumers among an existing brand set, what really is important to them, and what could be important in the future?  By taking a step back and evaluating what a brand actually stands for in the context of its intended consumers and market position, brands can work to expand the category instead of just competing for market share.

  4. Tuesday, March 20, 2012

    Eduardo Carvajal

    They make perfect sense for me, it is a fact that not everybody will always feel the same way towards the same products, in other words, just because it works for you it means it works for me.

    Recalling the Netflix example, for some people it is obvious it might be easier to get the movies at home, however, this will never replace the on the purchase point experience, for me is way better and more fun to visit the blockbuster store, see what other things are new, candies, videogames, sometimes I don’t even know what I’m looking for and its more fun for me to watch around and just grab something , read magazines and get my popcorn at the place, and why not, get a videogame as well just because the guy that was next to me rent it, although this is a common scenario in the virtual world ( look among other people choices, watch trailers on youtube or buy extra stuff on ebay links) it doesn’t change the on the point experience, sometimes I just want to go out of home because I being sitting around all day.

    Just because it works for you it doesn’t mean it might work for me, but for those who did, it means market share losses for some and market share gaining for others, do we still listen to vinyl records? Some of us still do but must of os moved to other things, do we still go to autocinemas? Some of us still do but most of us either go to movie theater premiers, some of us watch it on Netflix a time later of some of us might even watch free streaming.

     

     

  5. Thursday, March 29, 2012

    Trina Leigh and Gabriella Eden-Badger

    We agree that the three game-changing factors (expand, disrupt and exceed) proposed by Nigel are great and proven way for brands to grow, supplemented by Graham’s contention that real growth can also be stimulated by successfully expanding outside of a brand’s current category. Beyond these, we struggled to come up with genuinely different ways that brands had achieved sustained growth.

    However, we believe the current descriptions of these factors could be reviewed. As they stand, the description of these three factors are very product-innovation centric. Building on Drew’s comments, we contend that real brand growth can and has been achieved by radically better or disruptive communication that broadens category relevance, even in the absence of any product-based innovation.

    Great examples include Lurpak (ROI improved by 51% off the back of the 'Good Food Deserves Lurpak' campaign with the brand cementing its #1 BSM status in the UK) and Old Spice (sales for Old Spice body-wash products went up by a whopping 107%, following the launch of their online campaign ‘The Man Your Man Could Smell Like) without communicating a genuinely new product use, benefit or category-challenging product innovation.

    Expand/disrupt/exceed appears to be a pretty exhaustive way to drive genuine brand growth- but this can be achieved by established brands without changing the actual product… just the way they talk about it.

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