What comes first: Category or Brand?

Most confuse the process as they think that Brand comes before the Category. We’ve seen so many battles with this thought as most focus on the Brand than the Category while consumers think of the Category instead of Brand. Do you say I need to buy a new phone or an iPhone? Do you say I need to travel or I need Expedia or Thomas Cook? The strongest Brand will be the reference to a category. So what comes first: Brand or Category? Category comes first not the Brand. Whenever we say tissue we think of Kleenex, whenever when we think of information or search we think of Google, whenever we think of tablets we think of iPad and the story continues. Some of these Brands created their respective Categories and they’re the dominant players thereof

Let’s think how Brands can evolve a Category to own. The best example is Yahoo vs Google, Yahoo created the Search Engine, it was the reference before Google but Yahoo was everything not just search engine, the management decided to expand the portal and be the One-source Destination. Google came in with a new experience to search with great sets of values but Google (unlike its competitor) was focused on search and became relevant and preferred which is why today everyone says Google it, not search it. Yahoo Mail and hotmail faced the same scenario as that of search, Gmail came with new sets of values and took over which is why today Gmail is the largest Free Web based Email

Categories are created through Values, followed by Brand as a reference. Brands are ideas with sets of values as their core. If the Brand offers great sets of values as well as a very unique experience to consumers/users then the Brand is the reference to the Category

For example: in the US, the courier category within the shipping industry had many players till the mid-90s (Brands like DHL, Airborne Express, TNT and FedEx). When FedEx introduced the great value of delivering package overnight and before 10 am, it took over much of the local market making it the Category Reference. No one today says ship/courier the document in the US anymore; everyone says: FedEx It! Since then FedEx grew enormously and as a result DHL stopped serving the local US market while others like Airborne Express folded. FedEx evolved the category to own and they own it to this day

Today when we think of the category of smartphones, both iPhone and Samsung occupy our minds and not the operating systems iOS, Android or Windows. The Power of the Category serves the Brand in many ways as each of these Brands i.e. iPhone and Samsung; address two different target audiences. iPhone is more chic and appeals to intellectual and deep pocket users whereas Samsung appeals to Price sensitive users. So who owns the smartphone category? Both. Who owns the App category? Apple. Each Brand that owns a Category hardly spends money on Advertising e.g. Starbucks, The Body Shop and few others. Think of Kleenex, does Kleenex ever advertise? Does Starbucks ever advertise? Today Categories play a great role for those that create a Category or Sub-category. Yahoo created the Search Category, Google owns the Information Category, two different sets of values so what comes to mind first: Information or Search? Of course Search as its actionable followed by Information

Social Media had players like Friendster, My Space and others; today Social Media Category is dominated by facebook. It created new sets of values and therefore, is the first reference to the Category itself whereas Twitter, LinkedIn, YouTube etc. are Sub-Categories with each focused on its own purpose. Example: Youtube=Videos, Instagram=Pictures. The Social Media phenomenon comprises of two sets of environments and two different experiences i.e. Web and Apps. So focused Brands such as Instagram and Snapchat are creating great presence. Considering how dynamic technology is, everything could change overnight and different Categories and Sub-Categories will emerge

Things to consider:

  1. Think of the Category first and not the Brand
  2. Think of the Target Audience. Which segments you plan to address and concentrate more on Demographics and Psychographics
  3. Think of the Brand idea that’s relevant to your Audience (not to the Management)
  4. Plan both your short-term and long-term visions to own the Category or to create a Sub-Category
  5. Don’t battle within a Category that some other Brands own unless the Category is still maturing and your second or max third entrant in the market
  6. Research is a benchmark not a guideline to follow and most, unfortunately, fail to create but are clever to follow

If we look at the regional market, the biggest economy is Saudi Arabia. Most Category owners in the region are foreign Brands while very few are dominated by local Brands. This brings us the question: How rich is the region on Brand Knowledge and Experience? The obvious answer is that the region still works on Commodities while thinking of them as Brands. The region comes from strong trading mindset with short-term goals, completely opposite to its Western counterparts. Let me share both the prevailing Market logic and examples with reference to the regional behavior

  • Logic: The region is a trade market more familiar with tactical approach than strategy. The region aims for short-term gains over long-term ones which put pressure on the entire organization thereby resulting in continuous changes to its business model in order to acquire immediate sales. You can hardly build Brands on these termsThe organizational behavior within the region with most companies is more relevant to Commodity selling than selling the idea of the Brand which facilitates the users’ experience

    Let’s use one great local example:

    • Al Nahdi, the local Saudi Pharmacy chain, decided to evolve and move from the category of Pharmacy to Wellness Lifestyle. The company has done a remarkable job in restructuring and building great fundamentals to support the new evolution of the Brand from Pharmacy to Wellness Lifestyle Category. As much as I think that Al Nahdi did a great development within the Pharmacy Category by bringing a new meaning to the overall Pharmacy Experience in the Kingdom compared to others, at the same time I think Al Nahdi’s evolution from Pharmacy to Wellness Lifestyle will take a longer period to mature as an idea for Audience to embrace it as a way of everyday experience, Why? In the past three years the brand sold “Hope” and not the Brand idea that supports the evolution
      1. Al Nahdi’s approach on Brand is clear: To Reposition the Brand as Wellness Lifestyle which is a lifestyle that means to Stay Healthy and Look Great
      2. The Repositioning approach lacked both Brand Idea and Purpose. If the idea was to sell to the public “Hope” then how would that support the Repositioning of the Brand? Hope is more of a community initiative than a Brand Idea. So what’s the Idea or the Brand Purpose? I pondered on both for long and I can’t seem to nail them. We all know that Positioning controls the entire Marketing Mix but the Brand Essence needs to be more aligned
      3. Since Al Nahdi planned to evolve into the Wellness Lifestyle Category, what experience did they offer? Usually experience comes from a single promise. Is that also Hope? If I have to agree on Hope then how do you apply it to Wellness Lifestyle? Or how do you bring hope to Makeup, Skincare or Haircare products? These are part of Al Nahdi’s evolutions and they’re its reality
      4. I think the company did a remarkable job on the Marketing Mix and I salute them for it but the Brand was completely disconnected from the entire Mix and both are about one single purpose
      5. How the name Al Nahdi resonates with the audience as Wellness Lifestyle? Well not today but if the Brand is focused enough and more aligned, they will eventually evolve to resonate but this approach takes longer to materialize (they will have to witness generation change). Today Al Nahdi, after three years of Repositioning, is still perceived as a Pharmacy
      6. In store experience needs tremendous amount of work. You have to ask a human being for directions as in store lacks proper guidelines

Suggestions:

  1. Al Nahdi (with such a name) and Repositioning the sets of values should’ve been extremely unique in order to influence change
  2. Entering a new category or evolving from an existing one takes a long time because during that process others competitors can respond fast. Al Nahdi should’ve developed a clear Brand Idea that serves the essence of the Brand i.e. Wellness
  3. The Brand needs more focus, it also needs to break away from Hope because it rarely serves all the values that Al Nahdi is trying to sell to their customers
  4. Bring the Brand promise to the store level. Let customers experience the values
  5. Align the Brand with the Marketing Mix: Opening in malls was brilliant because that enforces your evolution

Overall, Al Nahdi has come a long way and I’m hopeful that with the new CEO, growth will continue. To evolve a Brand from one Category to another Category is not an easy task. It requires time, investment, education and momentum until the Brand is recognized in the new position. Creating a new category is the same as evolving as it requires time, education and acceptance

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Brand Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on AskBaaghil.com

The article was first published on Linkedin Pulse on 17th December, 2015

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s