A Category is a distinctive genre, classification or phylum. In business, Categories are associated with solutions a company offers its customers.
For B2C companies this means products or services such as ‘ride hailing’, ‘trance music’, ‘hybrid SUV’ or ‘frozen yoghurt’. In B2B industries, examples include ‘robotic process automation’, ‘neobank’, ‘biorenewables’ or ‘machine learning’.
Categories are closely aligned to how humans perceive the world. A lot of behavioral research links buying patterns to how customers take on information. For this reason, Categories are powerful tools to guide purchasing decisions.
It makes sense to work with, as opposed to against, how human minds work. Some Categories seem to have been definitively won. There are now established leaders in many Categories, many of whom have become the de facto generic brand of product line for their Category e.g Hoover, Sellotape, Google and Post-It.
Categories are most useful when buyers are ill-served by current offerings, which may have become commoditized over time, making incremental change seem irrelevant. New Categories though do not need to be based solely on new technologies, they may represent a breakthrough in service or a blend of service and technological innovation e.g. Uber or Amazon.
Categories play on inbuilt biases within humans which prevent true objectivity. The winners in any ‘Category War’ need not boast the best technology or largest marketing spend. Typically winners define buyer problems more tightly and solve real-world issues based on a highly-differentiated Point of View