You’re Not Competing In The Category You Think You Are! (The 5 Steps to Category Identification)

If you’re a regular reader here – and if not, then please sign up below so you don’t miss future posts – you’ll know my 7-step CatSight™ Process for Insight Development.

The first step of the process is to identify the category in which you are competing. If you don’t know the process, that may surprise you, but you’d be amazed just how many brands are not in the category they think they are. When was the last time you checked?

Just think about the consequences of an incorrect attribution; you would be concentrating on competitors that your customers never compare you with! And you would waste resources defending yourself against the wrong brands. Talk about squandering valuable resources! That’s why I decided to dedicate a whole post to this important topic.

But before I get started, I suggest you first read the post (Customer Centricity is Today’s Business Disruptor, Insights its Foundation) as background information. In it you’ll discover the full description of the seven steps of the CATSIGHT™ process, which I know will also be useful to you. In the article, I summarise the very first step of Insight development, that of category definition, like this:

C = Category

Whenever you want to develop an insight, the first task is to decide on the category you want to study. This may seem obvious to you, but in many cases, it isn’t as clear as you might have thought.

For instance, suppose you are planning on launching a new fruit-flavoured soft drink. You may think that you are competing with other juices or perhaps other soft drinks. But rather than just assuming the category in which you are competing, I highly recommend that you check; you may be very surprised.

Identify the category by zooming in

In working with one client who was in this exact situation, we actually found that their main competitor was an energy drink!

The reason for this was because this category is seen as being for lively, energetic, fun-loving people who need a boost. Whether this comes from the caffeine of an energy drink, or from the added vitamins and minerals of real fruit juices, which was my client’s offer, it didn’t seem to matter.
If we’d only looked at other fruit-flavoured soft drinks, we would have missed a whole – and much larger – segment of potential category consumers. By starting our analysis as wide as possible by looking at all beverages, and then slowly zooming in as we learnt more, we were quickly able to discover this perhaps surprising positioning for the new drink.
This shows the power of taking the consumers’ perspective, especially when segmenting a market. But more about that in a moment. 
The above example is a great start. But so many clients ask me to help them with their own category definitions, that I decided to detail the five most important steps in defining your category, so that you can do it for yourself for each of your brands and products.

 

Step 1. What is the category definition you are currently using? 

Continue Reading

Do Companies Still Benefit From Having a Market Research Department?

What’s your gut response to the title question about Market Research Departments? Yes? No? Being Swiss I would say it depends!

I am probably in the third camp. Yes, if it is a department that integrates and analyses information from multiple sources, and then delivers actionable insights and recommendations to the organisation. No, if it is the traditional market research department, whatever that is.

I first asked this question a few years ago and it generated a lot of – sometimes heated – discussions. Now after so many changes in the past couple of years, I thought it was worth revisiting. Please add your own perspective into the comments below and let’s get those discussions started again.

Thanks to social media and websites, the IoT (Internet of Things) and smart products, companies are inundated with information these days. Who better than market research to help in its analysis? But in order to become this new business decision support group, new skills are required.

Insights 2020 by Kantar-Vermeer ran some interesting research into the future of market research and insights. In their report, they spoke about the need for researchers to have five critical capabilities:

  • Research & analytics mastery
  • Business acumen
  • Creative solution thinking
  • Storytelling
  • Direction setting

The fieldwork is now a few years old but I still think it makes good background reading to make companies think about their own needs in terms of data analysis. Also, the world and business environment has changed dramatically in the last eighteen months.

Another study by BCG and GRBN resulted in an Invest in Insights Handbook to help organisations report on the ROI of the insights function. They reported that those who measure the ROI of their information have found a seat at the decision table, increased budgets, and more control. Those are the department objectives that the FMCG world in particular desires today, be they in a manufacturing or retail environment.

As the handbook mentions:

“Architecting a world-class Insights organization requires executive, cross-functional commitment/engagement”

To do this, the report mentions the following six points:

  • Vision & Pace
  • Seat-at-the-table and leadership
  • Functional talent blueprint
  • Ways of working with the Line
  • Self-determination
  • Impact and truth culture

The analysis concludes that:

“The biggest barriers to experimenting with innovation in CI are resources, both time and money. A lot of times there’ll be [a need for] an innovation project but it can’t find a home.”

Invest in InsightsThis seems to suggest, at least to me, a chicken and egg situation. Resources are insufficient because the business doesn’t see the benefit of investing in market research and insight development. But the Market Research Department is struggling with insufficient budget and personnel to provide the support that they should – and often could – provide.

In the GRBN report, they mention the largest barriers to the measurement of the ROI of market research and insight. These were found to be:

  • Difficult to do – studies are used in many different ways
  • Difficulty in isolating impact of consumer insights
  • Time lag between insight delivery and business results

The secondary concerns are:

  • Consumer insights distant from business decision-makers
  • Business objectives not clearly defined
  • Insufficient staff to measure
  • Lack of alignment on important metrics

Looking at this list, it is clear that the market research profession is in need of a significant overhaul. Continue Reading

Why Customers Are The Answer To All Your Problems (If You Ask the Right Questions)

Last week I asked whether it is employees or customers who are more important to an organisation. If you missed it read “Customers Care About a Product’s Value, Not How the Company Treats Employees” now and catch up.

I knew it would be a provocative question but I still didn’t expect quite so many comments! So this week I decided to be just as provocative and talk about the issues that challenge many businesses. And where the answer to whatever problem they have is actually quite simple. For me, customers are the answer! They can either answer or help you overcome any challenge or issue you may have.  Read on and then let me know if you agree.

 

How can I innovate more successfully?

 
According to an excellent article by Harvard Professor Dr Srini Pillay “Humans have a natural aversion to innovation because it involves a healthy dose of uncertainty and risk.”
 
 
Unfortunately, we try to reduce this risk by referencing past events to help us to predict the probability of our future success. Dr Pillay concludes that possibilities rather than probabilities are more likely to lead to better results.
 
I would concur with this statement, as the world is changing too fast to rely on past events as a predictor of anything in the future. This is why I say that customers are the answer!
 
It is only by getting closer to our customers and being constantly curious, that we have any chance of increasing our success in satisfying them.
 
It therefore makes sense that we involve our customers in helping us innovate. Not as a judge of concepts, which is what many businesses do. This is wrong because we know that consumers don’t know what they want, at least not until they see it.
 
However, they do know what their pains are; what is wrong with a product or service and what they would rather have. Co-creation and in fact ongoing conversations with our customers is the only way to stay ahead of the game.
 
In another article, this time in the HBRHeitor MartinsYran Bartolomeu Dias and Somesh Khanna from McKinsey shared the results of numerous interviews they conducted in Silicon Valley, the home of US (tech) innovation.
 
They conclude that it takes many skills and cultural changes for most organisations to become more innovative. These include:
  • Audacity and grit: The determination to continue despite failure. And I would add the acceptance of failure and the license for employees to fail too.
  • Strong leadership and true collaboration: An inspiring vision and the tenacity to make it happen – together.
  • Give employees autonomy. We all need meaningful work. The chance of helping an organisation grow is what motivates top employees. That and the freedom to make decisions based on clear goals but without directive processes on how to meet these objectives.
  • Build platforms, not products. This may be the hardest for many organisations to grasp.
Continue Reading

I hope you enjoy reading this blog post.

If you want me to catalyse your growth and profitability, just book a call.

Join Global Customer First Strategists!

Get our latest posts before everyone else, and exclusive content just for you.

* indicates required