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I was having a heated discussion (and a few margaritas) with dear friend about the merits and perils of entering a category after it has fully formed. On one side, you have the opportunity to be a fast-follower. On the other, you can just as easily become a failed-follower. In the end, I believe there is nothing inherently good or bad about being a late entry, provided you position yourself according to your timing.

Almost every product or service exists in a category along side similar products or services.  Just as products have a life-cycle from introduction to discontinuation, so do categories. The goal of positioning should always be a move toward category dominance (Technically, that’s when your product has twice the market share of any competitor).  Your positioning strategy should be guided by the timing of your entry into the category.

The following illustration shows the relationship between positioning strategy and timing. I’ve borrowed the adoption life-cycle curve from Geoffrey Moore’s Crossing the Chasm. It describes the number of new buyers entering the market for products in a category — not the lifespan of the category. (A category can go on for decades even if no new buyers are entering the category.)

On top of Moore’s lifecycle curve, I’ve overlayed four different positioning strategies — each coinciding with a specific point in the category’s maturation.

A new product can be launched (or repositioned) in a category at any point in the lifecycle.  How you position the product should be based on when it’s launched.

Market-forming strategy:  A useful definition of a market is “a group of people with a common problem who reference each other.” A market forming strategy identifies groups of people who don’t yet realize they have a problem and may or may not yet reference each other, but they have the potential to come together around an innovative idea and form a market — e.g, FedEx or Starbucks.

Category-creating strategy:  Most new products are clumsy, incomplete, flawed in ways that contribute to their getting stuck in what Moore called the Chasm.  If the shortcomings are real, a second-mover might exploit them and turn a quirky technology with limited appeal into a significant new product category.  I can think of no better example than the iPod. It isn’t just an mp3 player: along with iTunes and the iTunes Store, it’s an entire personal music system, the like of which never before existed.

Benefit-surfacing strategy:  Once the category has caught fire, you can’t expect to get in front of it without offering a fundamentally different reason to buy.  Amateur golf was enjoying a surge in popularity about the same time Callaway introduced the Big Bertha.  While other clubs touted distance and control, Big Bertha offered forgiveness — exactly what the amateurs needed, even if they previously didn’t realize it.

Delivery-differentiation strategy:  New products can be launched even when the category is fully matured and the number of new buyers is waning.  But the focus needs to shift from the product to the way it’s delivered. Laggard buyers often lag because the product benefit doesn’t outweigh the hassle of getting and using it. This is not the time for a faster, better, cheaper product; but faster, better, cheaper system for acquiring and using it.  In other words, Amazon.

Late in the lifecycle, new benefits and even better delivery systems tend to take a back seat to price.  The goal should be to so significantly change the user experience that it’s no longer comparable to its original category.  For example, Miller Lite is not a beer; it’s a light beer.

It’s easier than ever to satiate our needs and wants. There are more products in more focused categories delivering higher quality for less cost than ever. We’re less willing to offer our allegiance to any product when a better one is likely in the offing.

Product or category leadership is an increasingly specious objective. Simply deliver a superior product, and you’ll be rewarded with an onslaught of competitors and the pressure to make your product both cheaper and better — a battle for market share where margins are the casualty.

Those who do become leaders are increasingly hard to categorize. Apple Inc. dropped the word “Computer” from its name in January 2009. Rather than pursuing leadership through product excellence within the commoditized computer category, it pursued a strategy of bringing enrichment to people’s lives through creativity, music and self-expression.

Similarly, after Harley Davidson successfully petitioned the International Trade Commission for a 5-year tariff to protect its outdated motorcycles against low-cost Japanese imports, it did very little to make its products technically competitive. Instead it took the opportunity to make cartilage-compressing vibration and oil leaks an identifying part of the brand experience, and gave a market of Reagan-era white collar professionals something more — a culture they could proudly belong to — one that artfully melded Reagan’s 50s-era patriotism with an outlaw rebel persona.

We call the kind of loyalty enjoyed by Apple and Harley Davidson “brand significance.” Brand significance is not the result of branding. It is achieved by a combination of two, uniquely integrated accomplishments:

1. inventing a culture that brings meaning to people’s lives; and
2. providing a personally enriching experience that reinforces the culture.

The relationship between meaning, enrichment and significance can be illustrated as follows.

The company’s goal is to push its coordinates up and to the right by finding ways to make the brand more culturally meaningful (y axis) and personally enriching (x axis), resulting in the highest possible brand significance score.

The mechanisms for doing this work will be explored in other posts. First it’s important to see that significant brands go far beyond serving the needs of individuals and their current cultures. Equally important: brands should pursue this by design, not hope to get there by magic.

We were all so excited when the Russian market opened up.  Then after a few containers of Levis and Marlboros set sail, it seems like the party was over.

The Chinese people will soon be buying a lot of stuff.  I’m just worried it won’t be American stuff.  Much of what they need they can make themselves, for less. Some would say, if we are becoming a service economy, we don’t need to make anything anymore.

I would argue, if we want play in a global economy anchored by China, we need to make something — specifically, the one thing we know how to make better than anyone in the world — brands. But not American brands. We need to make Chinese brands. Things Chinese people want to buy because they represent being Chinese.

That means understanding the needs and motivations of people unlike ourselves — which doesn’t come naturally to most Americans.  But it does to American marketers.

One of the great things about starting Dangerous Kitchen is the opportunity to reinvent our methods and approaches to marketing. Today I’m rethinking the creative brief.

The template I use is a compilation of ideas from some truly great strategists and creative directors. I like it because it’s tight: just 5 questions.

1. Who are we talking to?
2. What do they currently think?
3. What do we want them to think?
4. Why should they believe it?
5. How is the message being delivered?

But it has a major flaw, specifically question 3, What do we want them to think? This could imply that the creative should change the consumer’s mind. That’s not only impossible, it’s . . . well, dangerous. It is the marketing equivalent of arguing with your customer.

For example, I suspect people will continue to think Toyotas are more reliable than Fords — despite the recalls. And the 30 years of “Quality is job one” advertising won’t help Ford usurp that spot. Ford stands for found on road dead and fix or repair daily because Ford argued with consumers — telling them their perception of poor quality was wrong.

Here’s my fix, and I welcome your feedback. Our job is not to change what people think; it’s to ask them to think something new. In other words . . .

3. What would we like them to think — that they haven’t already thought of?

If the message is remotely plausible, they might just believe it.

Like this: Tell me the company that makes powerful Mustangs and F-150 trucks also makes the most powerful hybrids? I’ll buy that.