Preference vs Relevance
Most companies in high technology industries struggle to compete against larger and often-more established rivals. Many of these might also be large companies seeking to move from being an OEM supplier to an established consumer or business brand.[/wptabcontent]
Marketing teams in these companies are challenged by their peers and the CEO to “do something”. Often, those team’s response is, “We need more advertising and promotion funds” … “Or we are being outspent by a factor of …”. The products or services may well be much better than that of the competition but no, or insufficient, headway is being made in the marketplace.
Whether or not it is stated clearly, these teams are attempting to establish brand preference in the minds of those in their target market(s) in established market segments.
Sometimes, however, an “unknown” or “known” company provides a unique product or service that fits an untapped market segment or need and finds incredible success in spite of much larger or well established competitors, who may spend orders of magnitude more attempting to influence brand preference. The product simply fulfills the segments’ needs (which may have been previously unknown) in a manner that no other does and a new category is created that resonates with the market. David Aaker refers to this approach as brand relevance. It is an important distinction because apparent competitors are, by definition, not considered since they are not relevant to the customer/consumer’s needs. This is referred to as brand relevance. it can be a “game changer” in the served market segment.
Origins
Long before the term “brand relevance” was applied, all of its elements were embodied in work done at Regis McKenna (RMI) in the mid 1980s and the term “category creation” was used. Like many insights developed by Regis and his partners, this term came to being based on real-world experience garnered by looking at the past and by working with clients, most notably Apple, where the general tenets were beginning to be understood with the launch of the Macintosh.
The team at RMI looked at history and studied how terms like Minicomputers, Microcomputers (what PCs were initially called), Personal Computers, Microprocessors, and others came into common use. These terms were mostly used within industry and consumers were largely unaware of them.
An Early Example of Category Creation for Consumers: Macintosh and Desktop Publishing
Lost in the recent success of Apple is how close the Macintosh came to failure after its launch in 1984. Initial sales were below expectations and software was limited. That began to change in 1985 when Microsoft released Word for the Mac and Lotus development released Jazz (Lotus 1-2-3 spreadsheet for the Mac), but still it was not a stellar product success. That began to change in 1985 with the introduction of the Apple LaserWriter, which utilized the PostScript graphics language to control the printing of images and diagrams, along with the introduction of PageMaker software.
This example is notable because it was serendipitous not deliberate. It just evolved in a way that only became obvious at the end, not at the beginning.
History
The first piece was the Macintosh, but it needed other elements to become reality. PostScript was developed by Adobe Systems (most notably John Warnock) and licensed by Apple for use with the LaserWriter, but the third leg of the stool was PageMaker, developed by Aldus Corporation. PageMaker allowed anyone with a Macintosh and Apple’s new printer to lay out charts, graphs, headlines, and text, and produce a magazine, newsletter, or newspaper. Importantly it also allowed marketing and sales teams to develop collateral quickly (more on the importance of this later).
The head of Aldus, Paul Brainerd coined the term “Desktop Publishing” to describe the solution and is the first use of a term to describe a category that I am aware of.
Journalist Paul Andrews described the development as follows:
“To anyone who remembered the tedious act of justifying columns in high school newspapers, of physically cutting and pasting headlines or awkward pieces of type onto glue-smudged page dummies, and of missing publication deadlines because the printer had four jobs ahead of theirs, desktop publishing was an occupational epiphany. It gave control to the creator of the document — control over the appearance, content, production and timing of the entire publishing process” (The Seattle Times, July 17, 1994).
The thing is, nobody knew they needed this before. It took three different companies (four if you consider that the mouse and GUI interface AND much of PostScript which came out of InterPress were developed at Xerox’s PARC) to make it come to fruition and a term that made instant sense to those who heard it, “Desktop Publishing”. This is an important part of category creation … the use of a term that is new but familiar to those who will utilize the products and services. The term “computer desktop” was in common use in both Apple and IBM-compatible markets. “Publishing” was also a well-understood term that usually involved huge printing presses. “Desktop Publishing” not only made immediate sense to those who heard it, but also met an untapped need.
Yet, it took another learning from market research to cause Apple to adopt the term and push it as a key differentiator for the Mac. Again from first-hand knowledge, since I directed the team that did some of the research, Mac penetration in business compared to that of the PC was strongly weighted towards marketing departments and ad agencies. Consumer use was also skewed towards “graphic use” of the Mac. Interestingly, consumers used non-desktop publishing software like spreadsheets and word processors to produce what we would call desktop publishing documents.
Not unlike the personal computer that took computing out of the hands of “white-frocked wizards” into the hands of the average person, desktop publishing took the publication of documents out of the queue and hands of graphic artists in marketing and made the creation of high quality documents easy and available to all. AppleTalk is an unsung hero in this development since it allowed instant sharing of a very expensive printer ($4,995) among multiple Macs (without the involvement of MIS as IT was known then).
Personal Experience
I know this very well, since I had just entered my high technology marketing career in 1985 at NEC Electronics. Marketing collateral timelines were in multiple weeks and sometimes months. Sales materials were often pushed back in the queue due to executive priorities like presentations (yes, there was a time when presentations were done only by marketing teams for everyone).
In early 1985 the price of memory (DRAMs) began to quickly decline and price lists were no sooner complete than they were out of date. The price of a 256 K DRAM went from $28 in February 1985 to $2 in November! The product marketing and sales teams used their bonuses from the prior year to personally buy Macintoshes, pooled funds for a LaserWriter (wired together by an AppleTalk network) without the services of MIS as noted above and took matters into their own hands to produce sales collateral quickly as needed. This was no small accomplishment since NEC made personal computers and was the dominant PC supplier in the Japanese market.
The Marketing Communications and MIS Directors were furious that we had done this without their knowledge or permission. However, we kept the company in the game and were able to sell our memory devices in a very tough competitive climate because we could keep our pricing current, so the Senior Vice President of Sales and Marketing smoothed things over by telling them to “Shut up” and learn something from what had transpired. The Japanese executives only cared about results and were at least outwardly quiet. What they really felt no one knew.
Apple Capitalizes on Desktop Publishing
Based on what was happening in the real world, Apple began to put their marketing muscle to use promoting the Mac and Desktop Publishing seriously. This and other developments made the Mac a true success. One might consider this Apple’s Trojan Horse in business, since Desktop Publishing was used as justification for the purchase of a Mac versus a PC, almost always over the objection of MIS/IT departments. Importantly, it resonated in both consumer and business markets. It was also a seed for another key tenant in Apple’s brand, “Ease of Use Promotes Use”.
The same research that uncovered the elements mentioned above also showed that Mac users spent more time each week using their computers and used almost ten times as many applications on a regular basis as did PC users. Follow up qualitative research we conducted showed that, although consumers would use different words or phrases, the common theme was that they spent more time and used more applications because it was easy. RMI and Apple boiled that down to the phrase “Ease of use, promotes use”. If you want to understand a critical reason for Apple’s success, you need look no further. It’s part of their DNA. Wouldn’t be a bad idea for you to use as well …
Next
In the next post, we’ll take a look at what I believe was the first deliberate marketing example of category creation, Silicon Graphics and 3D modeling.
