Master these routines, category innovation is simple!

How to judge a category trend and create a new category? Using “category history and category prototype” is an effective method tool.

Category history: the market development history and category history of the category at different stages. Category prototype: a category that is similar or similar to the new category, and provides a familiar category for the new category to learn from.

Through familiar history, create a strange future.

Create new categories with the help of high-end categories
The high-end category is the category of the mature and developed advanced stage market. Yesterday is today’s history, and tomorrow is today’s future. History is always changing in cycles. The biggest challenge for entrepreneurs is uncertainty, which requires us to see what is familiar and unchanged in unfamiliar changes. Since the market development level is different from the historical stage, the category in the immature and less competitive primary market (primary stage market) can study the development history of the mature and highly competitive high-end market category. Provide an important basis for judging the trend of category differentiation.

Case 1: Great Wall Harvard

In 2008, Great Wall studied the development pattern of the U.S. SUV high-end market in the past 40 years and found that the U.S. passenger car market was dominated by sedans in the early stage. With the development of the market, the proportion of multifunctional models represented by SUVs is increasing. The ratio of the first two reached 1:1 during the financial crisis in 2009. Compared with the situation where SUVs in the Chinese market accounted for only 5% of the passenger car market at that time, it is inferred that SUVs have a broad future in China. Great Wall Motor re-adjusted its resource allocation, gradually converging its resources to the Haval SUV brand, and established its position as an economical SUV. After years of focusing on innovation in the SUV category, Great Wall Haval has now become a global SUV leader.

Case 2: Blue Moon

On December 16, 2020, Blue Moon officially landed on the Hong Kong Stock Exchange for trading. From 2009 to 2019, Blue Moon won the position of Big Brother in China’s laundry detergent market for 11 consecutive years. How does Blue Moon do it in the Chinese washing market where there are many giants?

From the perspective of the development of global laundry detergents, the first generation is laundry soap, the second generation is washing powder, and the third generation is a laundry detergent that was used abroad in the 1980s. In the Chinese market before 2008, although many laundry detergents were already on sale, consumers’ traditional laundry habits could not be quickly switched from laundry detergent to laundry detergent due to the high price. Therefore, the laundry detergent market could not be strengthened or expanded. At that time, Procter & Gamble and Unilever, which controlled the Chinese market, misjudged the Chinese consumer market. They believed that Chinese consumers would still use low-end products such as washing powder and soap for a long time, while ignoring the rise of the Chinese middle class and the improvement of middle-class consumption power. Demand.

In Western countries, the market share of laundry detergent at that time has surpassed that of laundry powder, accounting for more than 80%, and it has the potential to replace laundry powder. Based on this, in 2008, Blue Moon launched a deep cleansing care laundry detergent, seizing this opportunity that was ignored by foreign giants. In 2019, Blue Moon’s total revenue was 7.049 billion yuan, accounting for 24.4% of the overall market share of China’s laundry detergent. And its gross profit is even more amazing, reaching 64.15% in 2019, successfully dominating the laundry detergent category.

Create new categories with similar categories
In the same market, the degree of development between categories is not the same. Another way to predict the future of a category is to study and learn from the development history of similar categories with high maturity and fierce competition. Similar categories have many similarities in category characteristics, and have similar consumer groups and consumption habits.

Case 3: Mosleyan

Pure milk is a similar category of yogurt. In the domestic dairy market, pure milk is a category with more intense competition and higher development maturity than yogurt. The category development history of China’s pure milk has roughly gone from the early days of bottled low-temperature fresh milk produced daily by local dairy companies to the lead of boxed high-temperature sterilized milk represented by Yili and Mengniu leading the country. A similar history will also occur in the yogurt category: the early low-temperature yogurt dominates the market, and the later boxed high-temperature sterilized yogurt sells well throughout the country. As a result, when local yogurt brands dominate different regions, Bright Moslian took the lead in launching boxed high-temperature sterilized yogurt, quickly breaking through the regional restrictions on yogurt, and becoming a big-selling yogurt brand with a single product sales of nearly 10 billion yuan nationwide.

Case 4: Small pot of tea

The 5000-year history of tea drinking has made tea a portrayal of Chinese life, and at the same time it is also proud. But despite the long history of Chinese tea culture, it is English black tea or Japanese matcha that is currently popular in the market. In 2016, nearly 70,000 Chinese tea companies exported a total of 1.48 billion U.S. dollars, which is less than half of Lipton’s global sales (more than 3 billion U.S. dollars). Because of this, there is a saying that “70,000 tea companies in China lost to one Lipton”. Relying on tea blending technology and packaging innovation, Lipton has subverted the tradition, realized the standardization of products and industrialized production, and made Lipton truly go global.

Lipton’s success has enlightened the small pot of tea: convenience and speed are the general trend of world tea consumption in the future. Since there is a standardized tea bag blended with one bubble, there will be a standardized small package can of original leaves. The small can of tea perfectly fulfills the consumer’s core demand for the “convenience” of drinking raw leaf tea: one can, one brew, nitrogen filling technology, clean and fresh. Through unified packaging, unified weight, unified grade, unified production standards, and unified price, small cans of tea establish product standards, help users build category awareness, create a standardized production process for enterprises, and drive industry standards to gradually unify.

Create new categories with the help of similar categories
Similar categories and new categories do not belong to the same parent category, or even the same industry, but they have similar characteristics. Companies can use the similar characteristics of similar categories to empower and create new categories.

Case 5: Dyson bladeless electric fan

Fans have hardly undergone major changes in the past 100 years. It wasn’t until the British inventor Mr. James Dyson invented the bladeless electric fan in 2009 to break this situation.

The invention of the leafless fan was inspired by Mr. Dyson’s inspiration for hand dryers. The hand dryer blows air from a small crack to dry the hand. The principle of Dyson’s bladeless fan is to use the rotation of the suction fan to suck air in from the base, the air flows into the upper ring cavity, and then is ejected from the circular gap at high speed. It’s that simple. The principle is similar to that of a hand dryer. The hand dryer has no blades, which is safe and does not hurt your hands. So Dyson thought of making an air propelling device that does not use fan blades. This is the famous Dyson bladeless fan later.

This is a revolutionary product that directly saves traditional fans from the low-end edge. Dyson bladeless fan products are all priced at 2,000 to 6,000 yuan, challenging the “ineffectiveness” of air conditioners with a high-end attitude. .

Case 6: A torn zipper carton

Speaking of a torn zipper carton, I have to talk about the founder Xing Kai. Xing Kai is a science student with a background in medicine. He has strong logical thinking and practical ability. He likes the feeling of doing it while playing. Later, when Taobao emerged, Xing Kai and a few friends thought about it and quit his job to start a business to play Taobao. This play has created an online celebrity cosmetics shop with annual sales of tens of millions of yuan. Dry online stores have to deliver goods every day. Xing Kai has long been impatient to pack and stick tape every day. Can you make some improvements and design a package that can be opened without scissors or tape and glue, and can be opened with a slight hand tear? The analogy thinking of an excellent product manager played a role. He quickly thought of the familiar thing of zippers: “Since there are zipper clothing, then you can have zipper cartons.”

After repeated trials and constant iterations, the early design team finally designed the seal of the package into a zipper shape. A simple zipper can be easily torn apart in just three seconds, giving you a three-second pleasure. Although it is not long, it is extremely personal, which can make you feel the joy of every unpacking.

Once the zipper carton was launched, it became a hot product and quickly won customers such as VIP.com, Ali, JD.com, NetEase Koala, Xiaohongshu and other large e-commerce platforms, express companies such as SF Express, and some new retail supermarkets. Relying on innovative single products to open the market, complete the process of breaking from 0 to 1, and accumulate many high-quality customers and suppliers for Yida.

Create new categories with the help of traceable category predecessors
The development of the times has made us go far and forget the way we came. At this time, tracing the predecessor of the category will help to discover new category opportunities. Tracing the predecessor of the category can clearly grasp the essence of demand, no matter how the physical form of the category changes, the basic core needs of customers for the category remain unchanged. At the same time, the predecessor of the category is also a powerful mental resource. With this powerful mental resource, new categories are easily accepted by consumers as soon as they appear on the market.

Case 7: Fangtai sink dishwasher

“How did people wash dishes before there was a dishwasher?” Of course, they washed the dishes in the sink. Since there is a sink for hand-washing dishes, there should be a sink dishwasher. If we think with the thinking of tracing the predecessor of the category, sometimes the path of category innovation is very clear.

When Fangtai Company conducted in-depth research on the dishwashing behavior of Chinese households, it found that everyone was used to washing dishes while controlling water. So I thought of combining the sink and dishwasher to make a brand new built-in appliance, and at the same time add the function of removing pesticide residues from fruits and vegetables. In this way, the sink, dishwasher, and fruit and vegetable purification functions are “three-in-one” sink dishwasher born.

Although dishwashers have entered the Chinese market as an imported product for more than 20 years, they have not detonated the Chinese household consumer market. It was not until 2015 that Fangtai sink dishwashers were on the market. Fangtai sink dishwashers have ushered in a round of rising volume of dishwashers in the Chinese market. It has also attracted the participation of more than 100 Chinese and foreign brands including Siemens, Haier, Midea, and Whirlpool, leading the new trend of healthy household washing in China.

Case 8: Jinmailang is cool and white

From pure water to mineral water, from surface water to groundwater, major brands focus on the water source and the shaping of the nutritional value of water, but ignore the present-day predecessor of bottled water.

No one has ever asked: What water did people drink before there was no bottled water? This question is not trivial. It immediately divided the bottled water market into two camps, raw water and cooked water, and directly asked a tens of billions of cooked water market. Boiling water and drinking cold and boiled water have always been the most convenient and basic healthy drinking habits for Chinese people. In the “Compendium of Materia Medica”, Li Shizhen in the Ming Dynasty referred to cooked water as “Taihe Decoction”, which could “help Yang Qi and move the meridians”. During the Wanli period of the Ming Dynasty, the Italian scholar Matteo Ricci also recorded in “China Notes”, “Chinese people are used to drinking boiled water, which is good for the stomach and allows Chinese people to live longer than Europeans.”

Jinmailang has a precise insight into the Chinese people’s drinking habit of “drinking cold and boiled water”, and has successfully industrialized, industrialized and packaged cooked water through modern production techniques such as purely physical high-temperature boiling sterilization and ultra-clean cooling canning. Since Jinmailang created the cool white boiled water category in 2016, it has continued to grow rapidly, with sales reaching 2 billion yuan in 2019 and exceeding 2.4 billion bottles in 2020.

Newton has a famous saying: The reason why I see farther than others is because I stand on the shoulders of giants. Category innovation is never from scratch, but from there to nothing. Companies can use existing category history and category prototypes in a timely manner, which will undoubtedly greatly increase the success rate of category innovation.

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