Marketing That Makes Competitors Irrelevant

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Book Excerpt: The right product positioning can entice customers to ignore the competition.

"Brand relevance has the potential to both drive and explain market dynamics, the emergence and fading of categories and subcategories and the associated fortunes of brands connected to them," writes David A. Aaker in Brand Relevance: Making the Competition Irrevant. "Brands that can create and manage new categories or subcategories making competitors irrelevant will prosper while others will be mired in debilitating marketplace battles or will be losing relevance and market position."

In this excerpt from Brand Relevance, Aaker explains one approach to making the competition irrelevant:

The Brand Relevance Model

The second route to competitive success is to change what people buy by creating new categories or subcategories that alter the ways they look at the purchase decision and user experience. The goal is thus not to simply beat competitors; it is rather to make them irrelevant by enticing customers to buy a category or subcategory for which most or all alternative brands are not considered relevant because they lack context visibility or credibility. The result can be a market in which there is no competition at all for an extended time or one in which the competition is reduced or weakened, the ticket to ongoing financial success.

Defining Relevance

To better understand relevance, consider a simple model of brand-customer interaction in which brand choice involves four steps organized into two distinct phases, brand relevance and brand preference.

Step One: The person (customer or potential customer) needs to decide which category or subcategory to buy and use. Too often a brand is not selected or even considered because the person fails to select the right category or subcategory rather than because he or she preferred one brand over another. If a person decides to buy a minivan rather than a sedan or an SUV, for example, he or she will exclude a large set of brands that are not credible in the minivan space.

One challenge is to create the category or subcategory by conceiving and executing an innovative offering. Another challenge is to manage the resulting category or subcategory and to influence its visibility, perceptions, and people's loyalty to it. The goal is to encourage people to think of and select the category or subcategory.

The fact that the person selects the category or subcategory, perhaps a compact hybrid, makes the starting place very different than under the brand preference context in which the category or subcategory is assumed to be given. Instead of encompassing only those buying an established category or subcategory, the target market is much broader, consisting of anyone who might benefit from the new category or subcategory. The selection of the category or subcategory is now a crucial step that will influence what brands get considered and thus are relevant.

Step Two: The person needs to determine which brands to consider. This is a screening step to exclude brands that are unacceptable for some reason. A brand is not relevant unless it appears in the person ' s consideration set. There are two principle relevance challenges: category or subcategory relevance and visibility and energy relevance (these will be elaborated in Chapter Ten).

Category or Subcategory Relevance: The firm as represented by a brand needs to be perceived as making what the people are buying and have credibility with respect to its offering. There can't be a perception within the selected category or subcategory that the brand lacks the capability or interest to be a player, or that the brand lacks a key characteristic of the category or subcategory.

Visibility and Energy Relevance: The brand, particularly when establishing or entering a new category or subcategory, needs to have visibility - it needs to come to mind when the product category or subcategory is selected. In addition, the brand needs to create and maintain enough energy so that it does not fade into the background. Brands that are tired, lack personalities, are not associated with innovation, and are simply uninteresting may not make the consideration set even though they are known and credible.

Step Three: Perhaps after some evaluation, the person picks one brand. That brand is preferred over others, perhaps because of a logical reason, due to some emotional or self - expressive benefit, or perhaps simply because of convenience or habit. The challenge is to create differentiation and bases of loyalty so that the brand is preferred.

Step Four: The person uses the product or service, and a user experience results. The use evaluation will depend not only on his or her expectations of the brand but also according to expectations of the product category or subcategory as conceptualized in the first step. The user experience can influence the next cycle of brand - person interaction.

Brand relevance involves the first two steps. A brand will be relevant if it is included in the consideration set for a target category or subcategory and if that category or subcategory precipitates the decision. Both conditions are needed. If either is missing, the brand lacks relevance and no amount of differentiation, positive attitudes, or brand - customer relationships will help.

More formally we define brand relevance as occurring when two conditions are met:

  • The target category or subcategory is selected. There is a perceived need or desire on the part of a customer for the targeted category or subcategory, which is defined by some combination of attributes, applications, user groups, or other distinguishing characteristics.
  • The brand is in the consideration set. The customer considers the brand when he or she is making a decision to buy or use that target category or subcategory. In other words, the brand passes the screening test.

Steps three and four define brand preference. One brand is preferred within a set of brands being considered. In static markets, brand preference is the primary goal of competition and marketing but, as already noted, this type of competition is difficult and frustrating and markets are increasingly dynamic, which makes brand preference strategies futile.

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About the Author: David A. Aaker is vice chairman of Prophet. Follow him on Twitter: @DavidAaker and on his blog: davidaaker.com

Reprinted by permission of the publisher, John Wiley & Sons, Inc., from Brand Relevance: Making Competitors Irrelevant by David A. Aaker. Copyright (c) 2010 by John Wiley & Sons, Inc. All rights reserved.

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