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Brand Strategy

Brand Growth Requires Changing The Game

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Brand Strategy Netflix

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:

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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2 Comments

Mac @ 36creative
Twitter:
on January 16th, 2013 said

It really comes down to stirring the pot and continuous innovation. Blockbuster could have had the stronghold on the same market Netflix dominated over they just didn’t have the vision fast enough.

Bob Jones on August 21st, 2013 said

Really eye-opening post. I think because of the development of technology and online marketing, blockbuster weren’t wary enough of how fast online DVD websites were developing, which obviously cost them dearly. I can also see Game shops being shut down as it is so easy to pre-order/buy games online. (same as music)

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