What & Why of Category Design
Conventional marketing is evolving, and it has picked up the pace in the past few years. It not about defeating your opponent anymore. It's about creating your own game and winning it with your style. There is a new marketing strategy into play, and it is called category design.
The modern era is all about digital marketing and innovation. Category design one such marketing technique in which companies create new categories for their products and services. In this piece, we'll learn about category design and why it is crucial. So, let's begin.
What is Category Design?
As discussed earlier, category design is the strategy that focuses on creating new categories that can be monetized before the competitor and to outperform the competition. It works by developing a unique niche for your business that doesn't have any competition. At the end of the day, you have 100% chances to dominate the market.
The idea of "category design" came into existence after the release of a book named "Play Bigger" in 2016. The founders of Play Bigger - Christopher Lochhead, Dave Peterson and Al Ramadan - created this completely new marketing strategy for growing business with writer Kevin Maney. In the book, they write about how big companies become successful by creating categories for their products and services.
Reasons Why Category Design is Important Marketing Strategy
There are different advantages of category design. You've got the idea about category design, and now you know the benefits of category marketing. But, there's more to it than just creating a category. Let's discuss the advantages of Category design in detail.
- Understand the Play
For a moment, think about conventional marketing techniques. No matter what product you're selling or whatever service you're offering, you are following some other brand's footsteps. Space is not yours. The path is not designed by you. It's someone else's. You're an actor in the play rather than a director or an innovator.
By using the category design technique, you create your play. The important part is that you understand the game because it's yours. It allows you to be in the driving seat and attract the ideal customers before anybody else in the business.
- You Become Category King
Different studies suggest that person who leads the category or creates the new category can capture 76% of the market's share. It's simple; you create the category, and you take all the profit. To sum up, you become the category king with so much profit.
- You Attract New Customers
If you look around, there are different examples of category design available. For example, Uber, Amazon, Apple, and Airbnb are the perfect example of category design, and they're leading in terms of growth and revenue.
The strategy of category design allows the customer to see the market from a new perspective. They view conventional marketing methods as old and outdated. With category design, you offer the solution to their problems, the problem which even they don't know they had. As a result, you attract new customers who remain loyal to your brand.
Examples of Category Design
There are different examples of category designs available throughout history. Here we'll discuss a couple of examples of category design:
- Honey: Coupon App by Rayan Hudson
Coupons are not new, and they're around for many years. Earlier, these coupons were printed in the newspaper, and people would busy themselves by cutting those coupons from the newspapers and cashing them at their local shops.
When e-Commerce grew, people didn't want the coupons. As a result, the genius Rayan Hudson developed an application to bring coupons to the customers. The app is named a Honey app that is compatible with different browsers, and it finds the coupon for the customer at the time of checkout from an online store.
- Frozen Foods: Clarence Birdseye
The idea of frozen food is from the 1920's by Clarence Birdseye. He sure had a tough audience to crack when he came up with the idea. People than preferred eating fresh food. As a result, the idea of spending money on purchasing frozen food was tough to sell.
When Clarence succeeded in convincing people of purchasing frozen food, the company profits went through the roof. In 2015 the company was sold for $2.8 billion.
Drawbacks of Category Design
Like everything, category design has some disadvantages as well. In this section, we'll discuss the cons of category design:
- Pressure to become Leader
As discussed earlier, the company that creates a new category before the competitor they lead and one who comes up with idea becomes the Leader. However, that's not always the case. Many leaders fail and the pressure to become a leader and to lead make them fail. It is because they had a brilliant idea, but they didn't stick to the plan or a solid strategy.
- No Guides
In conventional marketing, you're following someone as your guide, and that leads to you some success. But, in category design, that's not the case. When you create a new category, you don't have any guides. You can't follow anyone, and you don't have success stories or failure stories to learn and avoid the mistakes. So, you are on your own, and you've to find your way to success.
- High Failure Risk
Category design comes with high failure risk. It is because you're selling a new idea to the public, and in the presence of big brands, the chances of failure increases. You've to change the mindset of people to like the product or service that you're offering. If you don't follow the right strategy, you might fail.
Category design is a brilliant marketing strategy. If you do it right, you can earn lots of profit with ease. But, to do all this, you've to learn what category design. You should know how to create a category design for your business and how to market the idea. It looks easy, but there are chances of failure as well. So, before you begin, you should study all the aspects of category design.