Almost every enterprise will make mistakes in "creating new categories", most of which are due to the lack of systematic knowledge as a support, but with temporary decision-making and spatial layout as countermeasures, and finally miss the "opportunity to seize new categories in advance" and "the birth of great categories".
No manager is omnipotent, and has to admit that unless the "systematic standards" of pioneering products are continuously and systematically studied and managed, the probability of failure is surprisingly high. At the same time, they will also ignore the most obvious market dynamics, distort the most obvious market opportunities, resulting in frequent failures in market competition and constant marginalization. Of course, none of this will be what managers want to see, because the meaning of managers themselves is to innovate and create customers for the enterprise.
So how can managers change the chaotic status quo? ——The following provides systematic standards on how to create new categories to help enterprises clarify their thinking and have laws to follow.
External analysis of new categories often makes us aware of the need to use systematic knowledge to capture opportunities. Managers should first ask themselves the following questions:
First: What systematic knowledge of developing new categories in the market is effective?
Second: What systematic knowledge do we need to master to develop new categories?
Third: What is the most suitable for us to develop systematic knowledge of new categories?
Fourth: In what areas does the core competitiveness of existing new categories need to be innovated in order to obtain opportunities to accelerate the development of new categories?
Fifth: In what ways does the new category need to be clearly defined?
Sixth: What kind of response plan does the new category creation provide?
Gradually clarifying the above problems, managers will have a deeper understanding and ideas on how to successfully create new categories.
If our competitors are established categories, the best strategy should be to stand against the leading brands: KFC (positioning: children's park) vs Burger King (positioning: adult restaurants); Mercedes-Benz (positioning: ride comfort) vs BMW (positioning: driving experience). What needs to be determined is what the company should be able to meet the needs of its customers and what kind of contribution it needs to make in order to get a return, and then your market and customers will appear. If BMW can't be sure that its competitor is Mercedes-Benz, it probably won't have such a large market share of high-end models today.
Managers must make a contribution in order to achieve the desired goal, so in order to achieve the set goal, the new category needs to be the best in which areas that meet the cognition? In the face of many competing products in the market, it may be much easier if you can have a "unique brand name" and "positioning of the opposite".
Unless someone comes out and proposes the need to redefine the new category business, it is unlikely to develop naturally in a good way. Therefore, managers need to find and develop effective systematic standards for new categories and develop effective plans. The best solution is to carry out a linear layout, so that each plate is independent and mutually reinforcing, and the competitive situation is dealt with in an orderly manner, and finally a complete strategic positioning is formed.
If you want to make a new category successful, you naturally need managers to cut down on almost endless tasks that may be performed, and they also need to create opportunities for new categories within their capabilities.
Here are a few effective ways for managers to take:
(1) Give the greatest opportunity to the new category, and in terms of results, you must concentrate limited resources as military materials for the new category;
(2) They need to do a few of the right things and do one of the best.
(3) Give full play to the best operational benefits and reach the productivity boundary.
The "leading brands in the category" have all adopted the above three tried and test methods.
Systematic development of new categories can create the greatest results. One of them is that it can be the best for businesses for a long period of time, even for decades (Coca-Cola started Coke 100 years ago and still occupies a leadership position). This is done in order to maximize opportunities by concentrating available resources in the most attractive new categories and using those resources to obtain the greatest possible results of a market economy. Managers have a responsibility to maximize resources and innovate through new categories, opportunities that, while seemingly impossible to create by businesses, produce the highest possible outcomes from the high-quality resources available to them. In economic history, the rise of every truly great business has been based on these methods.
Case: The rise of General Motors
When Sloan took over General Motors during the Great Depression in 1921, the company was on the verge of collapse. Ford has a 60 percent share of the U.S. automotive market with one model. GM has only about 12% of the eight models, ranking second, but far behind. Of the 8 models, only 2 made money, and the other 6 all lost money – not only losing money, but most importantly, leading to the loss of GM's market position.
Sloan first thought carefully about what the ideal car company in the U.S. market should look like. He came up with a plan to control the market with 5 models. Of the existing models, only 2 (namely the premium Buick and Cadillac) meet the requirements of this plan. Three models were completely abandoned, and the other three were replaced by brand new models (but the original name remained the same). Sloan actually adopted a holistic approach to marketing, and the name was coined 30 years later.
Sloan's plans changed the concept of marketing about cars and the way they approached customers. Of his 5 models, each has a different price/performance ratio: it is the most expensive and best performing model in the cheaper grades, and it is the cheapest and simplest car in the higher price class. If he pays a little more, a low-income customer will buy a car that is far better than a Ford Model T in appearance and performance; if he pays a little less, a mid-range customer can also buy a low-end car that is almost on par with a mid-range car in appearance and performance; or he can pay a little more for a quasi-luxury car. Each of these 5 models is distinctive in the market, and their goal is to be a leader in the same class. At the same time, each model competes simultaneously with the others of GM on two fronts. This is because Sloan believes that success without being challenged is dangerous, so he gives each of his 5 models at least one powerful challenger, and this challenger is from these 5 models. This is the best interpretation of brands constantly attacking themselves to better self-innovation.
The plan makes GM the leading U.S. automaker within five years and the most profitable automaker to date. After World War II, when Ford made a comeback, it adopted Sloan's plan after much deliberation and poached managers from General Motors, all of whom had been influenced by Sloan's concepts and strategies.
In the early 1920s, Sloan's plan was very radical —it took his colleagues at GM years to accept him, so the plan was truly radical, deviating from all the "known facts" of the time. Sloan doesn't divide potential customers into a mass market that wants to buy the same car at the lowest price, and a small but high-priced upscale market. Instead, he believes that customers are essentially homogeneous, requiring both mass production and the performance, low price and convenience of second-hand cars, as well as new cars every year, with comfort and fashion.
Sloan didn't try to beat Ford by doing it just as well or even doing it better. He never considered following Ford's previous practice of producing the cheapest, standardized, and immutable cars. Instead, he made the Model T obsolete by something that Ford (or anyone else) couldn't possibly make: a used car that had been driving for 1 year, and it was only a new one 1 year ago. As a "means of transport", its competition with the Model T seems effortless – it has the look, fashion and performance of a high-end car, but it is even cheaper than the Model T.
At that time, the used car market was not popular with car manufacturers. Sloane thinks it's a really massive market. In the design, sale and maintenance of new cars, manufacturers must not only consider selling as many cars as possible in the current year, but also consider selling used cars as easily as possible after that.
In the mid-range car market, Sloan found that the price difference was less important. But here, as a symbol of noble status, the car plays the greatest role. This means purposefully identifying customers with a particular product that has a distinctive style and a certain continuity. For example, Buick cars have become a hallmark of successful professionals through their specifications, prices, sales methods and sales models.
For high-end cars, Sloan's question is: "Of the most expensive cars, what kind of car can still be sold to a level that only high-volume production can handle?" In this respect, this is also an original and unorthodox idea. People used to think that luxury cars must be handmade and handmade, and the production was small and the price was high, which was self-evident at the time. Before Sloan took office, GM also produced Cadillac along this line of thinking, and it was quite successful. Sloan, however, replaced the lucrative, handmade Cadillac with high-volume, production-line Cadillac cars. The former, while lower in cost than handmade cars in the same gear, almost surpasses Rolls-Royce in performance. Based on this, Chevrolet cars have become outstanding representatives of low-end cars within a few years, and Cadillac has also become synonymous with high-end cars.
It should be emphasized that Sloan's plan was neither the result of a flash of genius nor the result of years of hard work, mathematical models and complex computers. Before Sloan took charge of General Motors, he certainly did an in-depth study of the automotive market. However, at the time, he was completely concerned with the ancillary business, not the automotive business. He did not use a large number of people in the process of research, and he was accompanied by a small committee of the company's managers, and the work was completed in only 1 month. Sloan's main job is to observe the market and ask questions of his own managers and car dealers.
In other words: although the study was very short, very simple, and the results were not collated, the results were enough to form the basis for major decisions and actions. Managers can do this in general ways (although they should certainly take advantage of more complex methods, as long as they can speed up the pace of the work).
The implementation of Alfred Sloan's grand plan took many years. For example, it was almost 15 years before the Pontic car really became the car in Sloan's mind. However, the plan had immediate results from the start.
The purpose of creating new categories is to find opportunities, rather than focusing on the repair of existing categories, which can only solve the problems of the past, but cannot create new opportunities, let alone success. The success of the new category lies in the fact that managers focus on opportunities, and what we should correctly grasp is: "Opportunities! opportunity! opportunity! "Focusing on defeat doesn't make us successful, focusing on opportunities makes us win." The systematic development of new categories will make the market economy more prosperous and make the competition more benign, which also provides a better opportunity for building a century-old brand!