Victory does not exist at the end of the market, but in the minds of potential customers.
From a micro level, consumers often “think in terms of categories and express in terms of brands.” They are interested in categories, not brands. Category is the key force behind the brand.
From a macro perspective, wealth arises from division of labor. Differentiation is the driving force behind business development, and the power of differentiation comes from the constant emergence of new categories.
Over time, almost every category will differentiate. Leading brands that try to occupy every level of a differentiated category are doomed to face the possibility of losing their dominant position.
In contrast, a better strategy is to continuously prune the brand so that it continues to represent a single position in the mind, and then launch new brands to occupy the new categories that are developing.
This is exactly the opposite of what many people feel, which is integration. Combining different categories, such as Hema, is not yet a successful case.
We firmly believe in differentiation, and a large number of new categories will be born in the future.
In the 21st century, if you want to launch a new brand in an existing mature category, it is not only expensive, but also the future is uncertain. However, it is much easier to create a new category and launch a new brand. Therefore, creating a category and building the king of the category has become the first rule of business competition and brand building in the 21st century. It will have a profound impact on more and more companies and entrepreneurs.
It should be noted that there are two types of new categories: transitional categories and truly new categories.
For example, hybrid vehicles are a transitional category between fuel vehicles and electric vehicles. Transitional categories can fill gaps and achieve phased success for a period of time, but then they will gradually disappear. If your category is a transitional category, it will be very painful.
BlackBerry is also a transitional category. After the launch of the IPhone, in order to maintain its dominant market share, BlackBerry also launched smartphones of the same type as the IPhone and continued to use the BlackBerry brand. This obviously won't stop BlackBerry's decline.
As the category matures, the market share of the leading brand will become more and more solid, and it will become increasingly difficult for other brands to replace the market leader. This is especially true after a new category has developed for decades and become an old category.
Let’s ask most CEOs: What are the main requirements for business success today? The answer you get will be the same as what most customers will answer you: better products or services will win in the market. Assuming that better products will win in the market, what is the role of marketing? What confuses us even more is that the marketing industry also seems to think “better products” are the answer to everything. The truth is: most consumers think a product is better not because they think so, but because thousands of other people think so.
If you are the first brand in your field and become the market leader, you have a better product. If you are not the first brand and do not become the market leader, it is because you do not have a better product.
This is the Death Row Paradox: If you say you are innocent, we will kill you because you have no remorse for your felony; if you say you are guilty, we will kill you too You, because we will not execute an innocent person.
Many managers focus on creating better products. What they don’t understand is that the first brand in a category to occupy customers’ minds will almost always be the ultimate winner.
It often takes several years for a new category to reach a stable state, in which a long-term market leader, a strong second brand and many other smaller companies emerge. .
Few of these smaller brands have become one of the market leaders.
What brand name should a brand that is the first to enter a new category use? The best positioning strategy is to find a brand name that can be associated with the category.
Elon Musk chose Tesla for his electric car brand. We can know from many media reports that a man named Nikola Tesla invented many important concepts of electricity. Such as alternating current, electric vehicles and wireless energy transmission. This association between the Tesla brand name and Nikola Tesla connects the Tesla brand and the electric vehicle category.
Another way is to associate the function of the category with the brand name.
Three Trees brand paint, the image of a tree reminds people of nature, green, and environmental protection, echoing its functional and healthy paint.
Another point is that consumers always tend to simplify already long names.
The Coca-Cola Company is aware of this. People often use Coke instead of Coca-Cola, so they registered the two-syllable trademark.
Creating a new brand name becomes increasingly difficult because you need to find a brand name and a website with the same brand name. Most of the short words in English are already taken. Many businesses need to create unique names outside of English. For example, Starbucks uses a compound word that combines star and bucks.
Another useful method is compression. That is, take two words and condense them into a brand name.
Microsoft, whose English name is Microsoft, is an example of compressing two words, microcomputer and software, into one brand name.
The biggest question about names arises when you take your brand to the global market.
About 2.7 billion people in the world use Latin letters, about 1.4 billion people use Chinese characters, 1.1 billion people use Sanskrit letters, 1.1 billion people use Arabic letters, and some use Cyrillic letters or Tamil letters arts.
In different language systems, your brand needs to gain a good perception. Brands cross national boundaries. A brand name that works in one country may not work in another country.
In many ways, a country’s positioning is even more powerful and vital than a brand’s positioning. When a brand is associated with the country in which it is produced, the brand has a much greater chance of success in global markets.
For example, Russia is famous for its vodka. Founded in Moscow in the 1860s, Smirnoff has become the world's leading vodka brand, and it is also the world's highest-selling distilled spirits brand.
What marketers can exploit is customers’ innate trust in the authenticity of names. Enterprises should try to put the brand positioning into the brand name.
The traditional marketing method is to first study the target market, find the potential needs of customers, and then use marketing strategies to meet these customer needs.
In this market, you and your competitors are doing the same thing. You can't win with a marketing strategy that's similar to your competitors', which often causes confusion.
The key to winning is to differentiate yourself from your competitors.
Everyone knows that Great Wall Motors is now the leader in China's SUV market. But a few decades ago, if you study the market, you will find that cars are the largest market in China. There are 28 Chinese automobile companies focusing on the sedan business.
If you are customer-oriented, then you will make the decision to focus on the car business. If you are competition-oriented, you will focus on the SUV business like Great Wall Motors.
Jobs never believed in "customer-oriented". He once said that people don’t know what they want until you show it to them, which is why we never rely on market research.
If a competitor brand in a category has already occupied a strong positioning in the minds of customers, what should we do?
Then become its opposite.
There is always a space in the mind for the opposite brands of leading brands, which we can call the yin and yang of positioning.
You can relate to a leading brand by standing in opposition. The mind can always store the opposite of a word that already exists in the mind.
In many categories, second brands are the opposite of the leading brand.
For example, after Coca-Cola was launched in 1886, many competing Coca-Cola brands appeared in the US market. Coca-Cola first launched a 188 ml small bottle, and many competing products also launched similar packaging. Pepsi-Cola launches a large 348 ml bottle. And over the next few years, Pepsi ads emphasized this difference.
Now, among these colas, only Pepsi-Cola has become the second brand.
When your product has strong differentiating qualities, it will be difficult for your competitors to copy you, and your advertising message will be powerful. There’s no need to chase creative ideas or keep changing your slogan. Just keep repeating the same message.
Another way to differentiate new brands from market leaders is price. Many brands are established through price differentiation, occupying either the high-end market or the low-end market.
There are many coffee shops in the United States that sell coffee and sandwiches and other meals. In various small towns in every city, there is also a local coffee shop.
Therefore, starting from a coffee chain does not seem to be a wise choice unless the company has a correct positioning strategy. Starbucks is the one that stands out. Starting from a high-end coffee chain, the price is 2 to 3 times that of a traditional coffee shop.
Interestingly, everyone knows that China is a popular country for drinking tea, but Starbucks has more stores in China than any other country. If Starbucks were customer-oriented, I think the Chinese market would have been Starbucks' last choice.
No matter you walk into any Starbucks store, you will not receive a warm welcome, and what you see are mostly waiters with cold faces. No one will even take the initiative to tell you where the sugar and milk are. For those of you who frequent Starbucks, do you mind?
Therefore, a business cannot win by providing better service to your customers and potential customers. You have to get into the customer's mind by focusing on a specific differentiation. Unfortunately, almost every company in the world ignores competition and focuses on satisfying customer needs and wants.
The goal of marketing planning is not to satisfy all your potential customers. The goal of your marketing plan should be to create a unique differentiation that separates your brand from your competitors.
To win in the mind, the best way to get into the mind is with a unique concept that your competitors don't have.
Too many companies think there is only one way to build a brand. This is why every business in a category converges. They all try to beat their competitors by “becoming better.”
That is not the case, there is always more than one way to win.
Let's end this article with a sentence from Lao Tzu - the opposite is the movement of Tao.