The first step for any new business is to ponder how to occupy space inside a target consumer’s mind, which is called ‘Brand Positioning’. It can also be termed as a consumer’s perception of a brand with respect to competing brands.
Why does your brand need to enter his or her mind? If you ask a consumer to name a cola drink, ‘Coke’ name will spurt out. If you ask the consumer to name a toothpaste that comes immediately to the mind, most probably, Colgate name would pop out. If you ask about a photocopying brand, ‘Xerox’ name will spurt out. If you ask them the name of an energy drink, the red bull name will rush out. If you ask an Indian to name a noodles brand, most of the time ‘Maggi’ name would jet out.
Why do these brand names stay at the top of the consumer’s mind so that it can be recalled immediately?
Coke is the first cooldrink to enter the consumer’s mind under Cola category. Seven-up is the first cooldrink under the Un-cola category. Redbull is the first cooldrink under ‘energy drink’ category. Xerox is the first brand under the ‘photocopying’ category.
Being №1 in a consumer’s mind will help a business to grab a major market share and have a sustainable business. The above brands show that the easiest way to get into a person’s mind is to be first.
So, how can a business enter a consumer’s mind by being first? The business has to create a new category that doesn’t exist in a consumer’s mind.
What is the need for categories? Our human brains are wired for categorisation to help us remember things. Without that, we would be quickly overwhelmed by the vast amount of information.
Nicole Branan writes in ‘Scientific American’, “Picture a living thing — say, a dog. Now imagine a hammer. Thinking of a dog activates an area that deals with animate objects, whereas a hammer excites one that processes inanimate things even if you had never seen a dog or a hammer before”.
Whenever we come across new things, subconsciously, we would file them under different known categories in our memories. If a consumer sees your product, he would automatically file the product under a known existing category. The problem with this filing under the existing category is — your product would be filed several layers below the other products and the consumer would fail to recollect your brand name at the top of the mind. Example -Coke is the first product under the cola category. Pepsi is the second brand. Do you remember the third brand? Fourth brand? If you ask people, they may not recollect beyond two names. How many energy drinks can you name other than Redbull?
How To Create A New Category? -The new category should be based on the value offerings a brand can offer to the customer. For that, the company has to observe customers’ needs, desires, pains and choose value propositions that will solve customer’s pains and also match the business’ core strengths and core values. This is also called ‘Brand Differentiation’.
Michael Porter writes, “A company can outperform rivals only if it can establish a difference that it can preserve. It must offer greater value to customers or create comparable value at a lower cost, or do both”
We build a sustainable business by widening this differentiation and evolving the value propositions based on the changing needs and attitudes of customers.
BRAND POSITIONING OF NIKE
As we saw earlier that to create a category, we need to first freeze the target customer segment(Niche Market) and understand their requirements.
Focusing On a Niche Market. The general rule is to start small. Smaller the segment, it is easier for the entire company to focus and meet the customer needs, wants and desires. Once you become a leader in the niche market, you could grow your market.
Phil Knight’s Niche Market and Value Propositions
Nike founders Phil Knight and Bill Bowerman were athletes themselves. For athletes, shoes are a critical element. Having spent time extensively with a lot of budding athletes, Bowerman had developed a good knowledge about the needs, pain points of athletes with respect to shoes.
Bowerman was also a famous track and field coach in the 1950s and 1960s. He had constantly motivated his wards to develop a winning attitude. For winning, ‘speed’ is the defining factor and the shoes played a major role. Unfortunately, he was not happy with the shoes available in the market. He often lamented that none of the American shoemakers was interested in understanding the requirements of track athletes. The best shoes in the market at that time were from German manufacturers but they also had poor sole material.
To increase speed, Bowerman took upon himself to redesign the existing shoes to make them lighter. Lightness meant less burden while running and the athlete could devote all those extra energies into increasing the speed.
At the same time, long-distance running was also becoming popular and shoes that could last the race was hard to find.
“A shoe must be three things, It must be light, comfortable and it’s got to go the distance.” -Bill Bowerman.
So, Nike’s initial target segment was ‘The Runners’. The positioning strategy was ‘The lightest shoe in the market that would last in longer-distance running at a price lower than the German brands in the market’.
The above content is part of the following book.
AVAILABLE ON AMAZON -
References: Positioning: The Battle Of Mind by Al Ries-Jack Trout, Shoe Dog’ by Phil Knight.