The Billion-Dollar Branding Question: Differentiate or Category-Create?
It’s the ultimate hindsight question: should we or shouldn’t we create a new product category?
Exhibit A: a promising new product—coffee with twice the caffeine of regular coffee. Now that makes for a compelling brand differentiator in my book. But let’s look at what history says...
In 1985 when Wet Planet Beverages developed Jolt Cola, it was simply marketed as a cola drink with a kick. Where is Jolt Cola today? Correct.
The previous year in Germany, however, Red Bull was created and by 1992 was selling internationally under a totally new category: the Energy Drink. Now Red Bull is worth billions.
But back to our branding misstep…
An upstate New York roaster has created what it calls “the world's strongest coffee”—dubbed Death Wish—an eco-friendly gourmet brew with 200 percent more caffeine than the average dark roast. Death Wish Coffee bills itself as “the responsible coffee company with an irresponsible product.”
I admire their attempt at finding a fun and buzz-worthy niche in the coffee space, but as an AdWeek blogger called it, “this Jolt cola of java…” immediately raised a red flag as it reeks of Jolt's branding blunder in touting a differentiator in the crowded cola category instead of creating a new category to “own.”
“The world's strongest coffee” is a position just begging to be trumped by a competitor, making it almost unsustainable to own. For proof, just look at the low-calorie beer market. Carb-watchers saw Michelob Ultra get trumped by Miller 64, which was then trumped by Bud Select 55, and so on. A no-win proposition.
Should Death Wish have done the equivalent of creating an Energy Drink category? Since “energy” is already an implied attribute of java, there's no Energy Coffee category to own. But what about a coffee aimed at 20-something adrenaline rush junkies? Or a sports coffee?
Is this an opportunity for a new super-coffee category—a flanking strategy—instead of just relying on the obvious Coffee > Caffeinated > Strong positioning? What about a “gamers coffee” for geeks? Then they could capitalize on the popularity of the TV show by calling it Big Bang Super Coffee. Just a thought.
They could be the big fish in small pond, and then grow the snot out of that pond. They'd be better off than forever being a small fish in the coffee category’s humungous pond and remain obscure and unknown.