Grow By Creating New Categories

A clever way to find new growth is to change your market category or create a new one. When you create or change your category, you’re redefining the boundaries of your market space, and that opens your eyes to new targets of opportunity. Let’s look at how to do it.

One way to do this is by zooming up from your current category. That means you dial the category definition up a bit to create a bigger market space.

Here’s an example. Take the McIlhenny Company. It was founded in 1868 on Avery Island, Louisiana, and it makes one of my favorite products – Tabasco Sauce. Today, the company competes in its traditional category definition: hot sauce. But if it zoomed up that definition, it would imagine itself competing in the condiments category, putting it up against companies that make ketchup, mustard, and so on. That simple change in perspective might lead to new ways to communicate their brand or perhaps find new shelves to occupy at the grocery store.

But it doesn’t have to stop there. Let’s imagine the company zoomed up even more to a very broad level of food and beverages. Sound crazy? Well, not really. Viewed this way, the company might imagine creating new food items with its secret hot ingredients inside. Perhaps foods like pizza, or spicy tasting snacks. How about Tabasco chocolate bars. Imagine a new Tabasco carbonated beverage – cold, spicy, and very refreshing. The growth opportunities can seem endless when you zoom up.

Another way to redefine a category is to do just the opposite – zoom down. By doing this, you’re creating a subcategory that helps you focus your sales efforts more effectively to create growth. Let’s go back to our Tabasco example. To zoom down, you start with your current definition – hot sauce – then imagine dialing it down to a more precise definition. In this case, imagine a category called pepper sauce, or perhaps Louisiana pepper sauce. The trick here is to take a unique ingredient in Tabasco, like pepper, and create a new category definition with it. Be careful not to get so narrow that you limit sales. You have to promote this new category definition so consumers see it as a better choice over the hundreds of products out there.

A final way to find new categories is do what I call plotting the market. I sometimes need to see my market as a two dimensional space where I can plot my position versus my competition. This may help me see empty spaces that I can move into. Let’s do an example.

Imagine you compete in the personal computing market. First, I create a x-y plot where the x axis is the main, category benefit. In this case it would be computing power. On the y axis, I use another important benefit that consumers seek. Let’s use mobility.

In the lower right, you find desktop computers – powerful but not mobile. At the top left of the plot, you find smartphones – very mobile, but not so powerful. And in between, we plot laptops and tablets. Now notice the spaces in between these computing solutions. Today, we see companies trying to fill these voids with more powerful tablets, net books, and so on. All of these become potential new category definitions.

So take a look at your current products and services. Then, zoom up, zoom down, and plot your markets to find those new sales growth opportunities.