05 May 2016|Emily Smith
Attending a recent WPP focus group on the Telecommunications category, I stopped to ponder the relevance of the established category definitions in the world of marketing today. Some definitions no longer represent the range of products within them – Beers, Wines & Spirits include more ciders than ever before. Other categories have appeared from nowhere – subscription snack delivery services like Graze now compete with multiple in-store snacking categories. And some popular new products are hard to categorise, such as coconut water, and therefore they’re often located in unexpected places in store.
Do these definitions still help us or are they a hindrance? Do they actually prevent us from seeing risks and opportunities for our brands until it’s too late? Ten years ago, if you worked at Kellogg’s you aimed to win in a clearly defined category of breakfast cereals against a select competitive set the likes of Nestlé and Weetabix, and the whole industry was geared up to support this. Retailer buying teams focused on buying cereals, continuous data businesses measured sales & share within the cereal category, and marketing teams were structured under category or sub-category heads.
Most definitions reflected how people shopped and consumed different products and services, and so were helpful to marketers. Occasionally a new launch might spark a debate such as whether a cereal bar should be located with snacks or in the cereal aisle, but broadly they worked in practice.
Today, category definitions are being continuously challenged. Take ‘Telecommunications’. The pace of change has been immense; with mergers and acquisitions between established players (Orange & T-mobile, EE & BT) a shift into Quad-play where provision of fixed line, mobile, broadband and TV is packaged in one service (Virgin), new entrants in the market (Giff Gaff ), and emerging ways to communicate removing the need to own networks or infrastructure (WhatsApp now have 990 million users).
The Telecommunications category is unrecognisable from the definition we still use. So what value is there in continuing to use these outdated category definitions? You could argue – not much. But they were designed to help make it easier to organise products and services in a way that made sense to people, and the need for a framework of some sort remains necessary for marketers. But we need to adapt to make sure we’re not evaluating & positioning our brands amongst an out of date competitive set, and running the risk of becoming irrelevant to the very people we’re trying to attract. Whilst having defined categories allow us to form a landscape for opportunity, if we don’t push those definitions forward we’ll be losing out on exciting opportunities that could open up new avenues for relevance and ultimately growth. We have to perceive the framework to be stretchy, fluid and go beyond the traditional view of categories.
HOW CAN WE, AS MARKETERS, DO THIS?
1. Develop a compelling & category-neutral brand. Create a brand that transcends categories, so that changing dynamics are less of a distraction. Who knows or cares what categories Google operates within? They created a simple brand formula that’s applicable to almost any customer or business challenge.
2. Know your enemies & use this intelligence as a weapon. Scan culture so you know how your category is likely to change based on trends, and which adjacent (or totally unconnected) categories are likely to be targeting your consumers in the future. This intelligence can help you refine and evolve your brand so it continues to attract your target.
3. Carve your own path. Evolve your own category definition, and don’t be restricted by the past or the availability of information. Use your new definition to make changes in your business accordingly. Buy new data, generate new insight or bring in experts to help you navigate new categories, change the structure or focus of your teams if you need to, and find a way of measuring success against a non-traditional set of competitors.
Written by Emily Smith, Brand Director, UKprev next