Traditional marketing has changed over the last few years. What you need to focus on is creating your own game. You do not need to beat anyone. This new marketing strategy is called category design. We live in the age of rapid innovation and digital disruption. Hence, category design is the way to go. It allows the business to develop new categories of services and products. Thus, it is the creators who become the true leaders. This post will help you better understand category design.
So What Is Category Design?
In the simplest of words, category design is just a business strategy that places an emphasis on creating a new and unique marketing category that can be monopolized and monetized before competitors enter the space. Thus, the goal is to develop a new niche that is competition-free and easy to dominate. The book titled “Play Bigger” led to the term category design being used extensively in 2016. The book discussed how big corporations found success by establishing new categories of services and products instead of competing in established markets.
3 Notable Examples of Category Design
To better understand category design, it is important to look at a few examples. Let’s take a look at these famous examples.
- Birdseye: Frozen Foods
In the 1920s, Clarence Birdseye has a very difficult audience to wow. Everyone preferred eating fresh food and the idea of getting frozen food simply seemed out of question. But, Clarence was convinced that frozen food allowed people to eat food they normally could during the winter. This resulted in the company taking off. The parent company managed to be sold for $2.8 billion in 2015 and Clarence is responsible for establishing the frozen food industry.
- Honey: Coupon App
For decades, homemakers found themselves clopping discount coupons out of newspapers and magazines. It dictated their shopping habits. But, the rise of ecommerce led to people looking for alternatives and Ryan Hudson decided to create an app that made coupons easily available to consumers. The Honey app has helped customers save as much as $750 million. The app can be used as a browser plugin. It allows you to source through the internet to search for discount codes instantly.
- Netflix: Streaming Media
Netflix has changed the entire streaming media landscape. It put Blockbuster, a video rental store out of business. Netflix started out by providing people with door-to-door delivery. The CEO of Blockbuster did not see it coming and missed out on a huge opportunity. Netflix focused on category design and designed the perfect streaming media platform. It offers instant cinematic gratification to people without having to leave their homes.
Why Category Design Is Important For Marketing Strategy?
Category design as a marketing strategy is crucial. Some of the reasons why category design is important for marketing strategy are explained below.
- Help You Understand the Game Better
Take a moment to think about traditional marketing. Chances are that you are following in the footsteps of an existing brand. Thus, it is obvious that you did not design the space and it is not yours. You are simply a game player instead of an innovator or game-changer. When you use category design for marketing, you get to design a space of your own. This means you get to know the space better than any other business. By using this tactic, you attract the ideal audience and have an understanding of customers before others.
- You Become Your Own Category Leader
Studies reveal that category kings/queens that create a new category manage to capture as much as 76 percent of the market. Thus, it is clear that category design allows the business to take it all. The creator gets to enter a new market and profit from it.
- You Get To Attract a New Audience
There are many businesses that you can see today that have capitalized on category design. Some of the biggest digital giants of today such as Apple, Amazon, Airbnb, and Uber have take advantage of the strategy to build their own target audience. What these companies have in common is that they are able to present customers with a completely new solution that they had no idea they even needed. It allows customers to see the market in a new light. You get to solve problems for people that they never knew were even there. Therefore, you create an audience of loyal customers. Apple is the perfect example of this idea as it follows the mantra “Think Different”.
Are There Any Drawbacks to Category Design?
Now that you know why category design is valuable, it is important that you that has its own shortcomings. You might come across the following problem when implementing category design.
Pressure to Lead
As mentioned above, you should know by now that it is the company that becomes the leader of its category. But, sometimes, the innovators end up getting left behind. If you come up with an amazing idea, there are bound to be people that will try to imitate it. Just like how Blockbuster was slow to catch up with the online movie rental market, most companies lose their market because they are too slow to follow up. Only those businesses succeed that proceed with their idea. By creating a new category of services and products, you follow a new path. Since there are no mentors, no rules, and no guide ropes, going in unchartered territory puts a lot of pressure on you. No pre-existing market exists when you focus on category design. This is the main challenge for you as a creator. When there is no established market that you are trying to topple, most of what you do is simply based on assumptions you have come up with. It might sound exciting for many marketers but if you make a mistake, you might not be able to follow up with the idea.
How You Can Take Advantage of Category Design
As you have knowledge of category design, its examples, benefits, and drawbacks, let’s take a look at how you can take advantage of it. There are certain steps that you can take to create the perfect business strategy and disrupt the market. You can implement category design by doing the following.
- Identifying the Problem and Providing Your Unique Insight
The first thing that you need to do is identify what is missing in the world. Articulate the problem and think about how your unique solution could solve it. It should act as the foundation for bringing about innovation. Think about what problem the industry faces and if there is any current answer for it. Think about how you can fix the problem. For instance, Airbnb realized that traditional hotel and booking websites were cold and clunky. This is why the founders of the tech giant decided to provide people with an experience that they could look back on. This resulted in the transformation of the hospitality industry. When you proceed with your new marketing category, it is crucial that you frame the problem and solution in such a way that people can easily understand it and desire it at the same time.
- Select the Category Name
Every new category has a new market name. This name would comprise the new market type, the audience, and the nature of the underlying problem. It is common for the category name to evolve as it continues to develop. For instance, Uber and Lyft are called transportation network companies and now are known as rideshare companies.
- Detail the Ecosystem Map and Category Blueprint
You need to develop a category ecosystem that provides a framework for how customers, suppliers, partners, and developers should work together. This category blueprint and map explains how the problem in the market can be solved, how brand loyalty can be fostered, how you can take over space, and offer unique services and products.
- Define the POV of the Company
To succeed in category design, you need to present the new problem in such a way that it helps drive action. It is crucial that you allow people to see the true value of your new category. When you do it right, you make people believe in something that you believe in which makes it their obvious choice. Marketers have discussed the death of email for years. It was only when the Slack appeared in 2012 that people started to believe the prophecy. The founder of the Slack believed that business communication should be fun, more organized, and easier. The company was valued at more than $18 billion. Even though email has not been killed yet, Slack has managed to convince many people to make a switch.
Now that you have a better idea about category design, you can implement it for your own marketing strategy. You can create a unique business by following this marketing strategy and enter a completely new market space for your taking.