Brands often behave like icebergs. On the outside we find their image, what they project, and under the surface is their essence, what gives them shape. The deeper the submerged part, the stronger the mark. But there are two types of icebergs. The former are narrow and deep. The second are broad and superficial. Its benefits also vary, according to its morphology. The former offer greater stability and potential for better profits, the latter can reach greater capacity for sale thanks to their vast surface area.

What Brand Icebergs Look Like

Brands that have been formed according to the first, narrow and deep pattern tend to be stronger against attacks from competitors and are much more interesting at the investment level and also for customers. We only need to think of Ikea, Starbucks or more recent examples such as Camper. All of them are brands that have been built from a solid strategy that has allowed them to find a unique place in the market and in people’s minds, transcending their own products.

What sometimes happens is that the ice in the iceberg can start to melt if you are not sufficiently attentive to changes in the environment. You only have to look at how large blocks of ice such as Nokia or Kodak melted when the currents changed and the waters in which they found themselves were no longer so cold, with no time for them to react to the new categories that emerged in the environment.

Category Essence: A complement to the Brand Essence

Customer demands related to the category to which you are assigned must be part of your own brand strategy. As a complement to the brand essence , in the essence of the category (Category essence) there is a direct relationship between the objects/services that make it up and the usability/functionality demands that customers want. In a way, it involves the synthesis between the knowledge of how the category serves people’s interests and how the brand can satisfy them in a unique and relevant way. A great example is the case of SMART (Micro Compact Car Swatch Mercedes Art), the mini city vehicles with which Mercedes & Swatch knew how to invent a category that was not covered by anyone.

As more and more brands become commodities, category essence strategies take on greater prominence as a final weapon for all those brands that do not find true differentiation. The key to this issue lies in knowing the customers and what their motivations are so that they can really help the brand to be different.

The Differences Between Categories

But not all categories are the same, to simplify it we could summarize them in two: (1) products of regular purchase and (2) products of punctual purchase.

In the former, leadership is usually divided between two brands that are opposed to each other. Coca-Cola and Pepsi, iPhone and Samsung, McDonalds and KFK… If there were no second brand opposed to the first, then the category would tend towards the monopoly of the leader, with little weight for the rest of the competitors.

In the second category, one-off or non-recurring purchase products such as a car, insurance, a house… Brands behave differently in the absence of a clear leader. In this case, they must enhance a singular attribute that they must own. Volvo is safety behind the wheel versus the driving pleasure of BMW, for example.

Ignoring the category you belong to would be a mistake as it is really part of the brand strategy. But, as I said before, you can’t assume that the category will remain relevant forever to people and this will result in the growth of the brand. Categories grow or decline according to multiple factors such as changes in society. They grow when they start from a niche, but they shrink when they reach a peak that makes it easier for them to be replaced by better or more innovative ones. You don’t have to think about them from the manufacturer’s point of view but from the customer’s point of view. For example, cereal bars escape the category of breakfast cereals and enter the category of snacks because that is how customers understand them, regardless of the fact that for the manufacturer they are just another format to sell their usual product.

What Category Strategy Can Do for a Company

The category strategy can be of great help to the Company from the point of view of innovation, both in its products and in its business model. It can often be easier to create a new category or sub-category and lead it than to try to unseat the leader of the established category. This will require a shared vision from the management of the Organization, capable of coordinating an internal cultural change that goes beyond the mere creation of products; as well as a brand strength that conveys the confidence needed to move customers, current and new, into this new segment.

Just as climate change is one reality, permanent changes in the market are another. The worst strategy would be to let the iceberg’s ice melt hopelessly because you hadn’t been aware that the waters were getting warmer.

 

Carlos Puig Falcó

President of Branward®

Photos: Shutterstock


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