David Aaker on Marketing by Owning Game-Changing Subcategories

Why is ‘my brand is better than your brand’ strategy irrelevant?

David Aaker believes that instead of incremental improvements , marketers and business leaders would do well to build a sub-category. This changes the game from my brand is better versus your brand.

Unlike traditional views of disruptive innovation as creating a whole new category, David Aaker argues that growth occurs more often through creating something new within an existing category that delivers an improved customer experience or relationship. That has as much to do with branding as technology. David Aaker says “What is needed for a winning subcategory strategy, and what is missing from most strategy books, is branding’” . Further, Aaker says. “You always need an exemplar brand that will represent, position, and scale the subcategory—and ultimately build barriers, such as branded innovations or brand communities, to inhibit competitors.”

How formation & re-framing of Game-Changing Subcategories is the only way to drive growth

David believes that subcategory-driven growth has exploded in the digital era because of technology advances and the fast, inexpensive market access made possible by e-commerce and digital communication.The alternative, “my brand is better than your brand” competition, rarely generates growth because markets are so stable and difficult to disrupt. 

David talks about the the origin of the book, which came from his work in Japan. where he got ahold of data on the Japanese beer industry. And over 30 years there was only really three times in which the market trajectory changed that all of those could be explained by the creation of a new subcategory, like Asahi Super Dry. David studied industries like automobiles, computers etc and many other categories. Every time there was a big sales growth, in the category he was studying, David found that it could be explained by the development of a whole new subcategory. This subcategory , changed the customer experience or changed the brand relationship in a meaningful way.

David’s book Owning Game-Changing Subcategories explores the only ways to grow a business (with rare exceptions) which is to:

  1. Develop new “must haves” that define a game-changing subcategory that provides a new or markedly superior buying or use experience or brand relationship to a core customer base
  2. Become the exemplar brand that represents the subcategory and drives its visibility, positioning, and success.
  3. Create barriers to competitors that could include “must-have” associations and a basis of relationships that go beyond functional benefits.

David believes that the formation of new subcategories has been put on steroids by the digital world with the Internet of Things (IoT), e-commerce, and social media, Aaker points out. “Subcategories are orders of magnitude more frequent and more impactful than they were only a few decades ago.

Listen to David Aaker on Jagged with Jasravee

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