The Truth About Branding: Why Categories Make Brands, Not the Other Way Around
It is a common misconception that building a strong brand is the key to success in business. However, the truth is that categories make brands, not the other way around. In order to truly succeed, one must first create a new and different category for their product or business model to exist within.
Legendary entrepreneurs, innovators, and creators do not simply design brands, they design new categories. Without crowdfunding, there would be no GoFundMe. Without electric vehicles, there would be no Tesla. Without designer menswear, there would be no Ralph Lauren. The key to success is not branding, but rather creating a new and distinct category for one’s product or business to market within.
Many people mistakenly believe that branding is the solution to a lack of differentiation. They believe that by changing the colors, font, or logo design of their brand, they will drive a breakthrough in growth. However, this is simply not the case. One will never be able to overthrow the category leader by simply extending their brand into someone else’s category.
Take for example the case of Microsoft. In 2009, Microsoft attempted to take on Apple’s in-store customer experience by launching The Microsoft Store. However, by 2015, the company announced that it would be shutting the doors on the operation, resulting in a pre-tax charge of approximately $450 million. This is a clear example of the failure of trying to extend one’s brand into someone else’s category.
So, what is the solution for marketers, executives, and entrepreneurs? The answer is not to come up with vague attributes in an attempt to distinguish one’s company, product, or service from others. Instead, branding should be used in conjunction with the new and different category that one is creating. The category and brand must come together in a meaningful way for the customer, consumer, or user.
For example, 5-Hour Energy’s category is energy shots and the brand name reflects the differentiated category. Under Armour’s category is clothes worn under athletic clothing and the brand name reflects athletic undergarments. Lemonade’s category is insurance and the brand name reflects the company’s mission to simplify insurance.
Summing it up, it is important to understand that categories make brands, not the other way around. One must first create a new and different category for their product or business model to exist within before even thinking about branding. The key to success is not branding, but rather creating a new and distinct category for one’s product or business to market within.
About the author: Shane Allen is an accomplished entrepreneur and marketer currently serving as the Director of Marketing at PickNik, a company that specializes in developing software for robotics both on Earth and in space. With a Bachelor’s degree in Industrial Design and a background in mechanical engineering and business, Shane brings a unique perspective to his role as a marketer.
He has successfully raised six large rounds of investment for his inventions as a CEO, has multiple patents to his name, and won multiple pitching events worldwide. His expertise in both marketing and product design has helped him to create innovative campaigns that drive growth and results for the teams he’s involved with.
When he’s not working, Shane can either be found exploring the beautiful trails and mountains of Boulder, CO with his golden retriever Bandit or at home messing up his floors painting weird things on canvas. He is also an active member of the local startup community and is passionate about helping other entrepreneurs achieve success.
