Categories serve as the foundation for the competition-based approach to positioning because they imply the goal that a consumer achieves by using a brand. Referencing the example in yesterday's post, informing consumers that a brand has membership in the wine category tells them its purpose: it enhances the enjoyment of an elegant meal, and it promotes social relations. If consumers know the category, linking the brand to it quickly brings to mind the goal that is achieved by brand use; in other words, asking someone to have a glass of wine is an invitation to visit and to socialize.
In some instances, people may be unfamiliar with the category in which a brand holds membership. To address this issue, the points of parity associated with the category, rather than the category label, can be used to convey the goal served by the brand. If people did not know the goals achieved by drinking wine, a frame of reference could be created by describing a brand as a beverage that contains alcohol, goes well with food, and is enjoyed in formal and casual social interactions. Points of parity can also serve to clarify the goal served by the brand when category membership alone is insufficient to do so. Indicating that Two Hands wine is an accompaniment to an elegant meal or is appreciated at special occasions informs people that it is a high-end brand, not an everyday one.
Alternatively, marketers may employ exemplars of a product category rather than the category label to signal the goal served by a brand. Exemplars are brands that are widely known for a particular benefit. In the men's designer clothing category, Adam Kimmel or Patrik Ervell may be unknown. But when they are placed in a context of famous American designers of men's clothing such as Calvin Klein, Perry Ellis, and Tommy Hilfiger, consumers are likely to make the connection that the Kimmel or Ervell brand serves the goal of wearing clothing with cutting-edge design.
When a new brand is introduced, consumers attempt to categorize it in a manner that helps them understand at least one goal that can be achieved by using it. This is easily done when the brand fits neatly into a familiar category, as would be the case for a new brand of wine or beer. Selecting a category becomes more challenging for innovative products. By definition, such brands do not neatly align with the points of parity associated with specific, existing categories. In response to this problem, it may be tempting to employ an abstract category and associated goal. However, this approach can be risky.
Consider TiVo, which pioneered the digital video recorder category. TiVo's initial advertising merely told consumers that the brand empowered users to "watch what they want when they want." Although this proposition was appealing (who wouldn't want such freedom), in the absence of more specific product categorization, consumers had difficulty grasping exactly what TiVo was and, therefore, how they might use it. A better strategy would have been to begin by relating TiVo to a familiar category such as VCRs, explaining that like a VCR, TiVo enabled the TV viewer to record shows for viewing at a later time. Against this backdrop, consumers could appreciate what made TiVo unique (i.e., the point of difference), such as easier searching and recording due to the on-screen TV guide listings. Once such a basic understanding of TiVo (and DVRs in general) was established, the more abstract goal of controlling one's entertainment could have been meaningfully introduced.
Whatever the means of representing the category, marketers must help consumers understand the goal in using a brand before or concurrent with the presentation of information about why it is superior to alternatives with the same frame of reference. For example, when Apple introduced iPhone, it informed consumers that the brand was a communication device before it informed consumers about why it was superior to other brands. This category was evoked not only by the brand name, but also by comparing the iPhone to traditional phones in initial advertisements. Once people understood iPhone's primary communication function, additional functions such as ease of Internet search and e-mailing were introduced to highlight its points of difference in relation to other phones.
In other situations, it is important to present both the category and point of difference concurrently. For example, when consumers use a search engine such as Google to find a product, they are likely to be making an on-the-spot decision about which site to click on. Thus, a clear representation of the brand's category membership and point of difference in the Google listing will help consumers make this choice. Along these lines, FTD Flowers' listing states "send flowers, roses, gifts, gift baskets, and more with convenient local delivery." This identifies the specific categories in which the brand competes (flowers, gifts, baskets) as well as the point of difference (local delivery), and thus provides a basis for discriminating among the available alternatives. In contrast, when consumers land on Fogdog.com's listing, they are only informed about its category membership (football, golf, apparel, exercise equipment) and not its point of difference, which invites them to consider also Dick's Sporting Goods or Sports Authority, or some other online sporting goods vendor.
The importance of choosing a competitive frame by identifying a category is illustrated by the recent launch of the Nano economy vehicle by Tata Motors of India. Nano was introduced at a base price of 100,000 rupees (U.S. $2,500), making it substantially cheaper than Maruit Udyog, which was priced at about $5,000 and had 50 percent share of the economy market. With a population of 1.1 billion and low penetration of the car category in India (12 car owners per thousand in the population versus 765 in the United States), there were at least two ways to frame the competition for Nano. One possibility was as a safe alternative to the motorbike (a ubiquitous mode of transportation in India). This categorization was likely to attract those who were at point of entry in the car market, such as college students.
Alternatively, Nano might be positioned as an economy car that provides superior customer value. Nano was inexpensive to purchase, and it was relatively fuel efficient, promising 52 mpg in the city and 61 mpg on the highway. It was also stylish and offered more seating room than the larger economy car and main competitor, the Maruti 800. Such an approach might appeal to families that already had cars but would be attracted to a vehicle that offered superior value. Thus, the choice of the motorbike category versus the economy car category as the competitive frame affects both the target customer and the brand's point of difference.
Contributed to Branding Strategy Insider By: John Wiley & Sons, excerpted from Kellogg on Marketing, 2nd Edition by Alice M. Tybout (editor), Bobby J. Calder (editor), Phillip Kotler (foreword by) (c) 2010 by The Kellogg School of Marketing.
Sponsored By: The Brand Positioning Workshop