How to Create a New Product Category

The dilemma facing modern brands is the plethora of products available and the complacency of the consumer to listen to (yet another) advertising message. To stand out from this crowd, you’re going to have to be different – and the best way to stand out is to create a new product category.

What is a product category?

A product category can be defined as a group of products that are closely related because they are intended for the same use, are sold to the same customers, or fall within the same budget. Examples of product categories might include toothpaste, pizzas and bread.

To create a new product category, you have to create a variation of an existing product and create a new market. In this way, pizza can be “frozen pizza” or “take home pizza” or “home delivered pizza” or “gourmet pizza”.

Of course, if you’re first, you enjoy the first mover advantage. In other words, you’re the leader of the (new) product category and you can claim category leadership due to your authenticity. You’re the pioneer, the original. Perhaps the world’s most famous example is Coca Cola and its slogan “The Real Thing”.

Being first with something genuinely new has other benefits too. The media love to cover new stories – so you will have a much better chance of being promoted in the press if you’ve got something new and interesting to tell.

Product Category Examples.

Domino’s Pizza was not the first chain restaurant to make pizzas. But it created a new category (home delivered pizza) when it created the first US home delivery service for pizzas.

Apple’s i-Pod was not the first portable music player (in fact, it wasn’t the first MP3 player either). But it was the first sexy MP3 player that used a USB port and firewire to transfer music files and came complete with fully-integrated proprietary software to make it easy for users.

Fedex was not the first courier service, but it was the first to guarantee overnight delivery (Who can forget, when it absolutely has to be there…)

If you’re a small or medium sized business, and you want to build yourself into a big brand, look at what made big brands big. They grew big by carving out new product categories, getting media coverage because what they are doing is new and different, and claiming brand leadership. After that, anyone who tries to copy them is another me-too product.

The Strategic Rules of a New Product Category.

1. To be successful, product categories need to be very narrow – so avoid chasing big generic terms. By this I mean instead of “shampoo” target “dog shampoo” or even “tangle free dog shampoo” as the definition for the category.

2. Your product category has to be perceivably different (or new) from anything else in the marketplace. This means you need to choose a product category where there is no-one else (or if there are other players (such as in Apple’s MP3 player market), they are unknown brands).

3. You need to launch the product category through the use of publicity or public relations – not advertising. (Advertising is used to maintain an existing brand not to launch a new one.)

4. Your messages to the marketplace need to focus on the benefits attributed to the product category you have established, not your brand.

Want more?

Check out more of my posts on brand and digital marketing.


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