According to the law of contraction a brand becomes stronger when you narrow its focus. What happens when you narrow the focus to such a degree that there is no longer any market for the brand?
This is potentially the best situation of all. What you have created is the opportunity to introduce a brand-new category.
There’s a paradox here. Branding is widely perceived as the process of capturing a bigger share of an existing market. Which is what is usually meant when the newly appointed CEO says, “We have to grow the business.”
Yet the most efficient, most productive, most useful aspect of branding has nothing to do with increasing a company’s market share.
The most efficient, most productive, most useful aspect of branding is creating a new category. In other words, narrowing the focus to nothing and starting something totally new.
That’s the way to become the first brand in a new category and ultimately the leading brand in a rapidly growing new segment of the market.
To build a brand in a nonexisting category, to build something out of nothing, you have to do two things at once:
“Isn’t it easier to just promote the brand and forget about the category?” you might be thinking. Easier, yes, but not as effective.
When Apple introduced its ill-fated Newton, it forgot about the category name. At first it called the Newton a “PDA,” for personal digital assistant.
A notebook computer, a digital cell phone, or a digital watch can all be considered personal digital assistants. PDA did not distinguish the Newton from all those other personal digital assistants on the market.
You knew the Newton was in trouble when Apple ran big advertisements with the headline, “What is Newton?”
Better to answer that question before you launch a new brand rather than after.
Customers don’t really care about new brands, they care about new categories. They don’t care about Domino’s; they care about whether or not their pizza will arrive in thirty minutes. They don’t care about Callaway; they care about whether or not an oversize driver will cut strokes off their golf scores. They don’t care about Prince; they care about whether or not an oversize racquet will improve their tennis game.
By first preempting the category (as Prince did with the oversize tennis racquet, as Callaway did with the oversize driver, and as Domino’s did with home delivery of pizza) and then aggressively promoting the category, you create both a powerful brand and a rapidly escalating market. Callaway Golf outsells the next three brands combined.
EatZi’s is trying to do the same thing in the restaurant business. Average annual per-unit sales of the units in operation are an astounding $14 million. (The highest-grossing restaurant in the world is reportedly Tavern on the Green in New York City’s Central Park, which does in the neighborhood of $35 million a year.)
With only a handful of units in operation, EatZi’s has created an incredible amount of excitement in the restaurant industry. Yet the concept is simplicity itself.
Last year, Americans spent $207 billion on restaurant meals, a sizable market. Of that total, 51 percent was spent for takeout or home delivery.
What Little Caesars did in pizza, EatZi’s is doing in high-end white-tablecloth restaurant meals: narrowing the focus to takeout only.
That’s the way you build a brand. Narrow the focus to a slice of the market, whether it’s pizza takeout or gourmet takeout. Then make your brand name stand for the category (the generic effect) at the same time that you expand the category by promoting the benefits of the category, not the brand.
What are the benefits of takeout pizza? It’s the cheapest way to sell a pizza. No waiters or waitresses. No delivery trucks. As a result Little Caesars can sell a pizza cheaper than its competition. It captures this concept with its slogan, “Pizza! Pizza!” Or the promise of two pizzas for the price of one.
EatZi’s has yet to conceptualize the benefits of takeout beef Wellington, but that’s what it should be working on. Promote the category, not the brand. What EatZi’s calls the “meal-market” category.
When you’re first, you can preempt the category. You are the only brand associated with the concept. You have a powerful publicity platform. You need to put your branding dollars behind the concept itself, so the concept will take off, pulling the brand along with it.
What happens when competition appears, as it inevitably does? Most category leaders just can’t wait to shift into a brand-building mode. That’s a mistake. Leaders should continue to promote the category, to increase the size of the pie rather than their slice of the pie.
Boston Chicken was a huge hit when it opened its doors. It was the first fast-food restaurant to focus on rotisserie chicken for the take-home dinner market. But instead of continuing to promote rotisserie chicken, it changed its name to Boston Market, added turkey, meatloaf, and ham to the menu, and fell into trouble.
Leaders get antsy as their 100 percent share of the initial market drops to 90 and then to 80 or 70 percent as the market grows. “We’ve got to fight back and recapture our rightful share,” they say.
The rightful share of a leading brand is never more than 50 percent. There’s always room for a second brand and a passel of lesser brands. Instead of fighting competitive brands, a leader should fight competitive categories.
“Take the bus,” category leader Greyhound once said, “and leave the driving to us.”
“Take home your meals from EatZi’s,” the meal-market category leader could say, “and leave the cooking to us.”
Contrary to popular belief, what would help EatZi’s (and every category pioneer) is competition. Even though the leader’s market share might decline, the rise of competitive brands can stimulate consumer interest in the category.
One of Polaroid’s biggest mistakes was forcing Kodak out of the instant-photography market. Although it won a few million in its lawsuit, Polaroid effectively removed a competitor that could have greatly expanded the market. (A Coke/Pepsi advertising war benefits both brands. It attracts media attention, which expands the consumer’s interest in the cola category.)
Years ago, Johnson & Johnson, the leading brand of baby shampoo, mounted a major marketing campaign to sell the merits of its shampoo to adults. “You wash your hair every day, you need a mild shampoo. And what shampoo could be milder than a baby shampoo?”
Brilliant. At one point Johnson & Johnson baby shampoo became the number-one brand of adult shampoo. If other baby shampoo brands had jumped on the adult bandwagon, sales might have gone even higher.
Unfortunately for Johnson & Johnson, there were no other major baby shampoo brands.