Our categories (genres) diverge or split all the time. The Law of Division (Immutable Law of Marketing for Indie Authors Law 10) guarantees that a category will split off...eventually. The Law of Category (Immutable Law of Marketing for Indie Authors Law 2 and Immutable Law of Branding for Indie Authors Law 8) will tell us what makes that happen. Today I'll talk about what to do when divergence occurs around you. Click through the jumpbreak if you want to know more.
The Value of a Brand
There are few things you can count on in life--and fewer still in Digital Publishing--but you can count on a category dividing. Eventually. You may not know precisely when or where the split will occur, or what new subcategory will be spawned when it does happen, or even if your brand will be included in this half or that one. However, you can count on one thing: the split will occur. What happens to your brand depends on its value in the larger context of the category. That, in turn, depends on the placement of your brand in the specific context of the category within the minds of your prospective customers. Recall, the definition of a brand is as follows:
Without the ability to influence a consumer's purchasing behavior one way or another, a brand has no power--or value--at all. If a brand is immediately familiar and carries with a strong positive connotation, that brand will have a lot of power. It will be a valuable brand. It is one that can drive consumers to buy products.
If the brand carries no sense of recognition or brings with it any kind of negative connotations (note, barring the application of the Law of Candor, Immutable Law of Marketing Law , its value goes down or becomes a deficit to the brand owner.
Think about it. What makes Starbucks valuable? Is it the little green logo or the coffee, itself? It might surprise you to realize it's neither! Not the name, not the logo but rather, the instant recognition of the brand concept that Starbucks will serve you gourmet coffee (in-store or take-out) however you want it. In fact, Starbucks if famous for the level to which they will customize your order.
In other words, the mere mention of "Starbucks" brings to mind the idea of more than "just a cup a coffee" (like in a diner or "greasy spoon" place). Starbucks coffee is not only expensive, it's "fancy." It's special--like a special snowflake? For some people, yes. It's a treat many people across America give to themselves as a reward. The fact that the mere thought of the name "Starbucks" brings to mind all of this makes the brand name extremely valuable (more so than the products!)
In fact, Starbucks dominates the category of "fancy coffee, made to order." Personally, I really dislike Starbucks coffee, finding it too acidic (it actually makes me sick to my stomach to drink it). I prefer Panera Bread's coffee but they are, by definition of their chosen name, not a brand that specializes in coffee. It was a mistake to call themselves "Panera Bread" and along the way, the word "bread" has gotten smaller and smaller in their logo design but they are never going to be able to overcome the non-association with coffee without giving up the association with gourmet bread, their founding product line. This is the Law of Sacrifice (the Oh, Shiny! effect) at work.
Panera does not and never will dominate the coffee category in most people's minds. In fact, I might prefer Panera but even I think of Starbucks as the "leader." The rebel in me deliberately prefers Panera so as to not support the leader. That phenomenon--the antithesis of the "everyone knows" effect--is also quite powerful. It's the Law of Opposites (Immutable Law of Marketing for Indie Authors Law 9) at work.
Even being the secondary brand, Panera has a value because its position as "not #1" influences my purchasing decisions. Collectively, Starbucks and Panera dominate the coffee category here in the USA. In fact, Starbucks has expanded their reach--while keeping their brand narrowly focused--outside the USA to all corners of the planet. Like McDonalds, there are few places in the world you can go and not find a Starbucks.
Now what would happen to a third brand in the gourmet coffee category if they tried to spawn a new theme--say just coffee at lower prices? Oops, that category is already owned by Dunkin' Donuts! They're trying to undercut the Starbucks market by offering a more affordable but otherwise "like kind" product. To break off some of the Starbucks market, a new coffee brand would have to have some new concept that none of the existing brands offers.
How to Domninate a New Category
When Starbucks first opened, they were the new concept. All they did was serve coffee, fancy gourmet coffee, to order and at a higher price than most other places. They were not a bakery or pastry shop that also served coffee. They made coffee the central focus and named themselves a coffee shop. The fact they only served coffee was all over the news. people were talking and asking what the point was. Starbucks pressed on despite this nay-saying.
The only way to dominate a new category is create it and name it. Just creating it is not enough; you must also name it. This is good news. If someone else has spawned the new category in your genre area, you can name it and "magically," you will become the "leader" of the new category in the minds of the consumers interested in those products.
Starbucks created and named their new concept of a place to just take a coffee break. They promoted the idea of doing nothing else but drinking coffee and relaxing and their customers were curious. They even offered free WiFi as a lure to draw people into the stores for long periods of time. This was the hook that finally caught on and the industry changed forever. Now everyplace wants to be an "internet cafe like Starbucks"--even McDonalds!
Next Monday I'll look more in depth at what makes a new category "new" rather than simply "another."
Tomorrow's Tuesday Tip will be a followup on my "Lessons Learned" from the Ginormous 30,000 Hit Giveaway I'm just wrapping up. I posted a few lessons learned last week, but now that I've ended the entries and am managing the closure, I can share a few more tips. Hope to see you then.
Thanks for stopping by!