7 Ways to Become a Category Owner

If a brand can become the first brand we think of when buying something of this type, it means that the brand has become the category owner of this type. So how to become a category owner? Let's learn~

Why do we prefer to go to JD.com to place orders when there are so many electronic product websites? Why do we prefer to go to IKEA or IKEA when there are so many home furnishing stores? Why do we prefer to go to Bestore or Three Squirrels when there are so many snack food stores?

JD.com, IKEA and Three Squirrels have become category leaders in their respective categories. When customers make a purchase decision in a specific category, they think of them first.

There are similar examples. When we think of freshly stewed bird's nest, the first thing that comes to mind is Xiaoxiandun or Yanziwu; when we want to buy braised chicken feet, the first thing that comes to mind is Wang Xiaolu; when we think of natural water, the first thing that comes to mind is Nongfu Mountain; when we think of pickled fish, the first thing that comes to mind is Tai Er.

Brands such as Xiaoxiandun, Wangxiaolu and Nongfu Spring have become category leaders in their respective categories.

Once you become a category owner, you can enjoy unlimited benefits. For example, JD.com has many home appliance brands that want to enter and pay entry fees and traffic fees. For example, many shopping malls will reduce or exempt rent or even subsidize decoration for Taier Pickled Fish.

I guess you have also discovered that the category owners represented by JD.com and Ether2 seem to be a little different. We call the former channel categories, and the latter product categories. The relationship between the two is a mutual game and symbiosis.

Channel categories in the early stages will support the creation of category owners for product categories on their platforms, because this will bring traffic to the channel categories. Channel categories in the mature stages will restrict the creation of product category owners, because that means they have their own traffic and do not need to buy traffic from themselves.

But no matter what, becoming the category owner of their respective categories is the strategic focus that all brands must consider. Here are 7 ways to help you become a brand with its own traffic.

1. Focus on categories

Paying attention to categories means thinking about your own strategy starting from the category.

Last week, when I was chatting with Huo Jiajie of Linghang Positioning and Wang Bo of Dongji Positioning, we talked about the case of Feihe milk powder. Huo Jiajie said that one way to test the effectiveness of the positioning of "more suitable for Chinese babies" is to ignore the brand potential and look at the category:

If the potential of Feihe brand is the same as that of foreign milk powder, then "more suitable" is particularly convincing. However, because the potential of domestic brands is not enough, many people will feel that this positioning is not strong enough.

The conclusion is that if we put aside the brand potential and look at the category potential, it is real, so the next task is to continue to strengthen the brand potential.

Category is the power behind the brand. However, most people do not pay attention to category. One of the most obvious manifestations is that the brand name is more important than the category name in product promotion.

For example, the brand name of this restaurant brand: Xiaocaiyuan Anhui Cuisine is much bigger than the category name. In the minds of entrepreneurs, the brand name is more important. This is an internal thinking. Customers first consider the category and then the brand. Since customers think this way, the category name should be as important as the brand name.

Some people ask, is that how KFC, McDonald's, and Haidilao do it? They don't magnify the category name, but they do it well, don't they?

This is KFC's first store in China. It has large, clear letters saying: American fast food, KFC chicken.

This is McDonald's first store in the United States, and it clearly defines its category: hamburgers. This category name is even bigger than the brand name.

Haidilao did remove its category name. We think this is a mistake and a sign that the brand was misled by the consulting company. Haidilao itself also fell into internal thinking, thinking that all customers knew what it does. Let's imagine what a young man from a small town would think when he saw this sign when he first came to the city? Doesn't it look like a KTV?

Haidilao is not always so stupid. For example, the categories of its products are clearly written in its stores in Japan.

2. Naming categories

Category is the classification of things in the customer's cognition. The key word here is classification in the customer's cognition, not classification within the industry.

Many brands like to use their own professional terms to name categories, which is a manifestation of being trapped in internal thinking. For example, white goods experts, emotional drinks, healthy tiles, sports shoes, healthy spicy strips, weight loss toothpaste, etc. are all wrong category names.

For example, liquid-cooled electric cars are a wrong category name because customers don’t understand what liquid cooling is. Customers can understand sports shoes, but no one wears them when exercising, which is also a wrong category name.

Another well-known misnaming is Xibei Youmiancun. Except for people in the northwest, few people know about this category.

What is the right category name? First of all, it must be understandable to customers. Here, customers refer to general customers, or social customers, not expert customers who are very familiar with you. You must be able to abstract all people into one person, and define your own category based on customers at this level.

First, treat everyone as one person and define the category from the bottom-level logic of the mind. Then, starting from the abstract concept, find a potential group of people to promote the brand.

3. Create a new category

Generally speaking, the categories you are optimistic about are already occupied. For example, in the cola category, the category leader is Coca-Cola. In the purified water category, the category leader is Yibibao. In the bird's nest category, the category leader is Yanziwu. In the hot pot category, the category leader is Haidilao.

At this time, it is difficult for the category word "cola" to be occupied by latecomers. The solution at this time is to create a new category. For example, Wanglaoji actually created the category of cola that prevents getting angry. For example, Nongfu Spring created the category of natural water. Xiaoxiandun created the category of fresh stewed bird's nest in the category of bird's nest.

What we appreciate more is Jianyi's model, which is not to make segmentation within the original category, but to switch track from the tile category to the marble category.

We believe that this brand philosophy is a combination of Michael Porter's competitive strategy, Drucker's thinking and positioning theory. Porter mentioned that competitors may also come from outside the category, and positioning theory mentioned that competitors should be defined from the perspective of customer cognition.

Drucker often asked entrepreneurs a question: What do customers really buy?

In the creation of marble tile category, we should first ask: what do customers really buy? Do they buy tiles or marble? No, customers buy floor decoration solutions. This solution can be tiles, marble, or something else.

Start with Drucker’s way of thinking and think about what customers buy. Then start with positioning theory and think about what categories customers are choosing. Then refer to Porter’s inspiration and think about what competitors and opportunities there are outside the tile category.

So, when you don’t know what to do, go back to the beginning and ask yourself a Drucker-style question: What are customers really buying?

For example, the key insight of Stanley, a thermos brand, is to reposition this category as a fashion item.

The greatest value that consulting companies can bring to enterprises is to determine which category has the most opportunities. For example, Langjiu Group once believed that the biggest opportunity was in Luzhou-flavor liquor and invested huge resources in the Honghualang brand, but with the help of consulting companies, it was discovered that the biggest opportunity was in Qinghualang, a sauce-flavor liquor category.

Perhaps the question asked by Langjiu Group was how to expand the strong-aroma-flavored Honghualang, but the answer given by the consulting company was to expand the sauce-aroma-flavored Qinghualang.

Bighorn Deer is a relatively conventional way of creating a category, which further subdivides the category created by Jianyi to produce wear-resistant marble tiles.

One of the most difficult parts of creating a category is to focus on the strongest feature. First, you have to determine which is the strongest feature, and then you have to discard other non-core features.

For example, the Xiaomi air purifier focuses on one feature: PM2.5 removal. It abandons the functions of formaldehyde removal and odor removal. Focusing on the strongest features can reduce manufacturing costs and achieve the best cost performance. For example, the Xiaomi sweeper only sweeps the floor but does not mop the floor, and does not install a camera.

For example, ROBAM range hoods with high suction power focus on high suction power, while abandoning features such as quietness and power saving.

4. Evolutionary Categories

Another brand that has successfully created a new category is ROBAM’s high-suction range hood.

After FOTILE Kitchen Appliances pioneered high-end kitchen appliances that are more suitable for Chinese kitchens, ROBAM Electric Appliances continued to create range hoods that are more suitable for Chinese kitchens in this category: high-suction range hoods.

After creating a category, what needs to be done is to continuously evolve the category and continuously inject new potential energy into the category.

ROBAM high-suction range hoods firstly focus on the range hood category in kitchen appliances, and secondly focus on high suction among the three characteristics of quietness, power saving and high suction. More importantly, it clearly created and named a new category: high-suction range hoods.

The strategy of Robam's high-suction range hoods is to discover positioning, occupy positioning, and expand positioning. After discovering the positioning of high-suction range hoods, Robam clearly defined the category and seized the recognition, becoming the representative brand of this category.

More importantly, the category is continuously evolving. After focusing on the high-suction range hood, ROBAM High Suction has continuously upgraded this category. After launching the 6th generation product, it launched the dual-chamber high-suction range hood. The brand proposition is also very clear: dual-chamber dual-suction, 1 second smoke control.

ROBAM's continuous self-offensive is the best defense. Accumulating technology and knowledge in the category of high-suction range hoods is the brand's moat.

5. Differentiated categories

Categories will continue to differentiate.

The category of sports shoes continues to differentiate into basketball shoes, football shoes, tennis shoes, running shoes, badminton shoes, etc. The category of social software continues to differentiate into stranger social software, sexual minority social software, interest group social software, etc.

The category of drinking water is constantly differentiated into purified water, mineral water, natural water, boiled water, mineral water, etc. The category of beverages is constantly differentiated into cola, Sprite, orange juice, herbal tea, etc. Even tea beverages are constantly differentiated into black tea, green tea, iced tea, oolong tea, etc.

At first, there were only light-fragrance and strong-fragrance liquors, but later they were differentiated into sauce-fragrance, rice-fragrance, and mixed-fragrance liquors. The first thing that small and medium-sized enterprises can learn from Moutai is to create a category of their own.

In the history of contemporary liquor, the most amazing innovation of Moutai is that it has changed the standard by which people have evaluated the quality of liquor for hundreds of years - from judging the taste to judging the aroma.

During the "Moutai Pilot Project" in 1964, the people of Moutai discovered three typical types of Moutai liquor, and then defined "sauce aroma" as the most fundamental characteristic of Moutai liquor.

At the 3rd National Liquor Evaluation Conference in 1979, the Chinese liquor industry first distinguished famous liquors by their aroma. The four major aromas, namely sauce aroma, light aroma, strong aroma and rice aroma, were first proposed, and later gradually divided into 12 major aromas. Since then, the liquor industry has entered an era of "one aroma ruling the world". (The Story of Maotai)

Another example of category differentiation is General Motors, which believed that the trend of the American automobile market in 1920 had changed: customers needed not fast transportation but identity labels.

I guess this insight comes from Drucker, who wrote "The Concept of the Corporation" while visiting General Motors. In "The Effective Executive", he said that when customers buy Cadillacs, they are not buying transportation, but buying prestige.

Based on this insight, GM CEO Sloan divided its brands into Cadillac, GM, Pontiac and Chevrolet. Each brand is sold to different classes, and there is a large price range between them.

In fact, each brand represents a category.

Even in 1920, when Ford had a 42% market share and GM had only 11%, GM insisted that Ford's ideas were out of date.

GM believes that in the new era, cars are no longer simple means of transportation, but a prop that represents the identity, status and taste of consumers. Consumers still pay attention to functions, but also attach importance to appearance, design, comfort and driving experience.

GM provided different brands for different classes of consumers: Cadillac, GM, Chevrolet, Pontiac. Facts have proved that GM's concept is correct, and the times are on GM's side.

In 1927, GM surpassed Ford to become the number one in the US auto industry. ("Brand Positioning General Knowledge")

5. Fusion Category

Al Ries himself is against category integration, but we believe that integration is also a way to create categories.

Mr. Reese used the theory of evolution as an example. The process of biological evolution is continuous differentiation, and the categories in the business world are also constantly differentiating. He concluded that differentiation is the way to create categories. He also strongly opposed integrated categories. He and Jack Trout both opposed Swiss Army knife-style products, believing that products that combine multiple functions will eventually fail.

The reason why we raise different opinions also comes from the theory of evolution. In the evolution of nature, many transitional species have appeared.

Land animals evolved from fish, but in between there are amphibians, which have characteristics of both fish and land animals.

Fish characteristics: There is a small dorsal fin along the edge of the tail, a series of bony fin rays at the tail, a short snout, preopercula in the cheeks, and many small scales on the body.

Amphibian characteristics: limbs (each with 8 toes) and limb girdles typical of early amphibian, no gills (this species is thought to have breathed only with lungs) and powerful fin rays, with labyrinthine teeth.

In the business world, there are many integrated species that create new categories. For example, extended-range new energy vehicles integrate electric and fuel technologies, music restaurants integrate live music in the restaurant, and smartphones integrate touch screen technology, camera and music playback technology.

Smartphones did evolve from personal computers, but they merged with digital cameras (tablets) and telecommunications phones to become what they are today.

For example, Haval Motors was the leader in the SUV category in the era of fuel vehicles, and it can also integrate new energy technologies to become the leader in the SUV category in the new era. If the Haval brand can realize that category integration is also a way to create new categories, it will not miss the opportunity of the new energy vehicle era.

6. Expand product categories

There are two directions to expand product categories: one is potential energy and the other is scenario.

Taking Bosideng as an example, the ways it increases its potential energy include: using aerospace technology, associating with luxury brands, international fashion shows, collaborating with design masters, upgrading channel image, etc.

By applying the Long March 5's aerospace temperature control materials to down jacket products, customers' perception of the brand has been greatly upgraded.

By comparing Bosideng with Arc'teryx and Canada Goose in terms of cold-proof technology, customers can feel that its cold-proof technology is more powerful, and also feel that Bosideng is a brand of the same level as Arc'teryx.

Frequent appearances at fashion shows in places like London and New York are also an effective tactic to boost brand momentum.

These methods are summarized in the book Brand Positioning General Knowledge as: Campaigns to ignite people's hearts. Its core principle is to continuously build high potential around customer feelings.

It is also easy to understand how to expand the scenarios, which means to expand the category market in terms of application of time and space.

For example, Red Bull first entered the market among long-distance train drivers, and its advertisement was "I need to drink Red Bull when my car needs to be refueled." After gaining a foothold in this channel, it began to expand into larger scenarios, including the energy replenishment scenario for overtime work in the office.

For example, Lululemon was originally a professional yoga pants brand, but it also incorporates daily wear scenarios. As the scenarios become bigger, sales will also increase.

We want to emphasize that it is easy to understand and easy to do to build a big scene, but what is more important is to create high potential. Building a big scene can produce short-term results, but building potential requires long-term investment. The latter is often not taken seriously because it cannot be quantified and evaluated.

This also shows that brand building is a long-term strategic behavior of the enterprise and cannot be regarded as a promotional or marketing action.

VII. Conclusion

Becoming a category owner with its own traffic is the ultimate goal of all brands. We have summarized 7 ways to become a category owner: focus on categories, name categories, create categories, evolve categories, differentiate categories, integrate categories and expand categories.

First of all, you need to understand that behind the brand is the power of the category, and the category name is as important as the brand name. Customers first choose the category and then the brand, so whether it is the channel door, product packaging or brand poster, the category name must be placed in an important position.

Secondly, we need to create categories based on changing trends and the competitive environment. The key is to find a strong enough feature that corresponds to a sufficiently painful pain point in the customer experience. After creating a category, we need to continue to evolve and upgrade it to lead the evolution of the category.

For small and medium-sized enterprises, it is enough to expand a category with a hit product. For large enterprises, they also need to actively differentiate and integrate categories and constantly create new category leaders. For example, General Motors has created four category leaders with four brands, and Coca-Cola, Mengniu, and Nongfu Spring also have many brands.

Brand building requires systematic knowledge, and category thinking alone is not enough. "General Knowledge of Brand Positioning" has summarized the theories in this area as completely as possible, which can give you a holistic view of brand building.

Author: Zhang Zhiyu WeChat public account: Zhang Zhiyu