When is it time to come up with a new category?
The first entry in the classic book The 22 Immutable Laws of Marketing, by Al Ries and Jack Trout, is the Law of Leadership. As the authors state it, "It's better to be first than it is to be better."
They illustrate this law with a question: Who was the first person to fly solo across the Atlantic Ocean? Even if your memory needs a little jogging, everyone knows the name Charles Lindbergh. He was the first person to fly across the Atlantic, and in so doing became a permanent fixture of American folklore. But here's a follow-up question: Who was the second person to fly across the Atlantic Ocean?
The second person to fly across the Atlantic did it faster and with less fuel than Lindbergh. Yet unless you're an early flight aficionado, you probably didn't know that the man's name was Bert Hinkler. The implications for marketing, as noted by Ries and Trout, are that whatever category you're in, you want to be the first in it. That's why huge corporations—car companies, say—spend huge sums on presenting you with the same commercial over and over again. It's an attempt to stick in people's minds, to capture the conceptual pole position in their market vertical. The Law of Leadership, in essence, is about being the prototype for your category.
The second of Ries and Trout's entries is what they call the "Law of the Category." Again, they ask another question: Who was the third person to fly across the Atlantic? You might think you have no idea, but that's not entirely true. The third person to fly across the Atlantic Ocean solo was Amelia Earhart, better know as the first woman to fly across the Atlantic. We know her name because she's first in her category, one that she created and owned, rather than third in someone else's category. As Ries and Trout put it, "If you can’t be first in a category, set up a new category you can be first in."
From a psychological point of view, the Law of Leadership is relatively easy to understand. If I give you a market vertical, like soft drinks, then you can think of the leader off the top of your head. Most everyone would say the leader in soft drinks is Coca-Cola. It's a simple matter of association, of being bombarded with advertising and product placement. But the Law of the Category is trickier. What constitutes a legitimate new category? Sure, we know the first female solo Atlantic flight. But what about the fastest solo Atlantic flight? The longest solo Atlantic flight? The first failed solo Atlantic flight? The first commercial Atlantic flight? The first solo Pacific flight? These seem like they could all be reasonable categories, yet we all know Earhart and Lindbergh but not the others.
This is part of a more general class of cognitive problems. Here's another example:
When Marco Polo drew up on the shores of Java in the 14th century, no one on his crew knew what a rhinoceros was. They had never seen one before, nor had they heard of this animal. So when Polo first spotted a rhino, he had two choices. He could try to fit this strange creature into a familiar category, or he could put it in a new one. He chose the familiar category and declared he had found a unicorn.
Polo later admitted to some puzzlement on this point, writing that "they are not of that description of animals which suffer themselves to be taken by maidens, as our people suppose, but are quite of a contrary nature."
Of course, we know now that Polo categorized this animal incorrectly. He hadn’t in fact discovered a unicorn. Yet it's easy to understand where his confusion came from. Putting things in the right categories is a difficult problem—especially when you're a European in Indonesia in the 1300s and you only know of one category for animals with a single horn emanating from their snout. So how does the mind know when to create a new category and when to stick with an old one?
There is a theory from Harvard cognitive scientist Sam Gershman that attempts to explain the way the mind solves this problem. The theory centers around what Gershman describes as "latent causes." The idea behind a good mental scheme for categorization is that it puts similar things in the same category and different things in different categories. Of course, this depends a lot on your definition of similarity. Gershman's theory proposes that similar things have the same causes. And more often than not, these causes are hidden, unobservable, or in Gershman's term latent.
Take the rhino / unicorn categorization for instance. The reason that rhinos are a legitimate category has to do with genetics. There is a genetic template shared by every member of the species. There is no such template for unicorns. Such a genetic template is a hidden cause. You can't look at it and immediately understand cause-and-effect, as you can with two billiards balls crashing into one another. Instead, you have to make a tricky inference about what's going on underneath the surface. In short, you have to know about what you can't see, just by observing its effects.
This is what makes finding the right market vertical so challenging. Not every categorical scheme that puts your brand on top is going to be a legitimate one. The problem that you’re faced with in trying to decide the right category placement is essentially the same as Polo’s: What are the latent causes that define your brand’s category? Just be sure to know when you’ve spotted a rhino, and not confuse it for a unicorn.
Originally posted on Psychology Today.