What is market category?

|| July 22, 2014

Market category is the sub-market your brand competes in.

In most markets, customers keep just two or three brand leaders at the front of their minds. However, they find it much easier to be aware of the leaders in sub-categories. 

It is generally better to be number one or number two in a smaller category, than number seventeen in a larger category. 

Categories are in the minds of customers: the brand-owner can influence this, for example through advertising, product placement and social media, but not control it.

Very often a category will become established when a competitor enters it. Counter-intuitively, a competitor entering a single-brand market can energise the category and dramatically increase overall sales. Market share reduces, but total sales and profits go up.