Confined, not Defined by Product Category

The definition of your business and brand in the minds of customers is crucial to marketing success. A recent article in Advertising Age by marketing guru Al Ries illustrates how defining your company by the product category in which it operates can confine future growth. He chronicles the slow demise of Eastman Kodak, a company that achieved status as a brand icon in the photography category. But, as film gave way to digital photography, Kodak has been left to fight to regain relevance in the minds of consumers.

Ries' article reminds me of the often used example of the decline in the American railroad industry. Many people believe railroads lost their competitive advantage over airlines not necessarily because airplanes can deliver people faster. Instead, railroads lost their competitive advantage because they failed to understand they are not in the railroad business, they are in the transportation business! Their success depends on meeting the transportation needs of businesses and individuals; trains just happen to be the means by which they make it happen.

Define your business in terms of the benefits you provide, not the type of category or industry to which you belong. Technologies and tastes change, a fact that can seriously threaten businesses whose operations are not guided by the consideration of the benefits people want from products or services they buy. Categories may come and go, but if you are in tune with customers' needs and wants you will be in a better position to change along with them.