Do you know what kind of brand you’re building?

As technology enables new user habits and needs, new brand categories evolve. For brand builders, it’s crucial to get one thing right when communicating a product or service – what is it?

The new world

There was a time when competition was mainly a battle for market share in a familiar and fairly predictable arena. Brand building was a matter of establishing that this brand is better than that other brand. Today, it is not so much a matter of which brand is better, but whether we trust the brand enough to be influenced to do new things together. New tech-enabled product and service categories emerge and fade out of the picture at a rapid pace. People make use of brand relationships as they navigate these new and messy competitive arenas.

The old brain

But while the world changes rapidly, the way our brains work does not. This presents some new challenges to brand builders in our time. How can innovators best find or create subcategories in which to position and grow new brands? And how can brands navigate category shifts in line with shifts in the competitive arena, and still maintain existing brand relationships? Brand building starts with understanding the phenomenon of categorisation.

We used to think that the brain perceives something by first becoming aware of it, then evaluating it and assigning it to a category. On the contrary, according to scientists today. We categorise before we evaluate. Things that don’t belong to a known category can seem almost invisible to people, and that is not a great starting point for brand building.

Acquiring new categories takes time and is pretty hard work for the brain. To make it simple for us to see them, successful brands like Vipps, MobilePay and Klarna, focus on a single feature – peer-to-peer payments, pay with your mobile, and smooth transactions – even if all these brands have a wider portfolio of things that they offer.

Subcategories

New brands have a few options. Some innovative brands take advantage of changes in trends and behaviours by defining new subcategories that propel them from niche to mainstream. Beyond Meat, for example, does this by insisting that its plant-based product is meat. Why would they do that? As a category, “meat substitute” is niche. It is relevant and visible primarily to people who don’t eat meat. Some people are eating less meat, for a variety of reasons related to health, the environment or animal welfare, but many of us are not that conscious as consumers and eat what we are used to eating.

Simply by saying that there are different categories of meat – meat from animals and meat from plants – Beyond Meat enters the large competitive arena for all carnivores. Granted, there are other expectations as to the versatility and juiciness of a meat product than just being a meat substitute. But this is a challenge Beyond Meat seems happy to take on to play in the big league by placing its plant-based meat subcategory firmly inside the big meat category.

Anchor and twist

Another option for a new brand is to create a new category and position its brand inside it in one go. This is hard work. Oatly is an example of a successful anchor and twist manoeuvre. The brand does not say that it is milk, but by saying that it is like milk, the brand is anchored in a familiar category. The twist that separates the new category from the old is explained by saying that unlike milk from the cow, which is for the calf, oat milk is made for people.

Another type of anchor and twist is when a tangible product (such as an electric scooter) becomes a service provided through an app (such as Voi), similar to how music CDs were replaced by streaming services. We have learnt how this goes, so new categories of this kind are readily available to us (and our brains) when presented as a product-to-service scenario.

Navigating ­category change

But what happens when a brand’s category has become obsolete through disruption? Is the brand destined to become obsolete as well – like Kodak? Not necessarily. Some brands succeed and grow stronger by maintaining relationships through category shifts, and we allow them to introduce new business models and present us with new ways of providing value. Consider Netflix. Netflix had built a strong brand as a DVD sales and rental company and was able to maintain its relationship with its customers, as well as reach new ones, as it transitioned to streaming.

When it further expanded its brand from content distribution to content production, that was another way of strengthening that brand relationship. As long as a brand is able to cater to people’s evolving expectations, the relationship endures even if the category changes.

More of this, please

Strong brands that navigate category shifts and find or build new categories are easy to spot when we look at how technology has led to changes in how people consume and find entertainment. Other categories cry out for the same level of brand building innovation to help us see and understand the relevance and value of innovative products and services. Education, health and finance seem to be particularly ripe for clarifying subcategories, meaningful identities and business models we can understand and trust – basically, brands.

The choice of category is a strategic one and should be based on establishing which category will give a brand the best possible chance of playing a part in people’s lives, now and in the future. The opportunities for creating strong brands that can take significant positions are clearly there. But make sure you can answer this question clearly before you go any further – what is it?