Magazine article CRM Magazine

Ruling the Roost with Relevance: Being the Preferred Brand Is Not Enough in the Face of Quickly Shifting Market Dynamics

Magazine article CRM Magazine

Ruling the Roost with Relevance: Being the Preferred Brand Is Not Enough in the Face of Quickly Shifting Market Dynamics

Article excerpt

In his new book, Brand Relevance: Making Competitors Irrelevant, marketing guru David Aaker analyzes the most successful brands, from Whole Foods to Prius, from iPod to Kindle. In defining brand preference, as opposed to brand relevance, Aaker outlines successful strategies to make you better than your competitors in almost every arena. Vice chairman of marketing consultancy Prophet and a professor emeritus of marketing strategy in the Haas School of Business at the University of California at Berkeley, Aaker spoke to editorial assistant Koa Beck about classic economics and the importance of creating subcategories.

[ILLUSTRATION OMITTED]

CRM magazine: Why was the U.S. computer industry such an important example in conveying brand relevance?

David Aaker: I could have picked almost any industry. I originally thought of the Japanese beer industry, which is packaged goods, but I wanted a B2B durable as a nice contrast so people did not think it only happened in packaged goods. You can find a similar formula anywhere.

The computer industry is a good example because when these new subcategories were formed, you generally had one or two companies that were the dominant brands. Some of the other categories were a little messier, but it was so vivid in the computer industry.

CRM: In defining "brand relevance," you encourage creating new categories or subcategories to create a competitive arena. Why do that through subcategories?

Aaker: You can engage with "brand preference" competition in which you're going up against a stack of established competitors, categories, and subcategories. That approach just doesn't ever really move the needle at all. Market share is very stable in almost all categories, and it doesn't matter what you do; it just stays there. Pick any category and the market share is just stable for decades. All this churning doesn't affect it, but when you introduce a new subcategory, like GoGurt or hybrid cars or network computers, then things really change big time and there are huge differences in sales.

CRM: What about developing subcategories changes the space so much? …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.