Dealing with Categorical Perception

Dealing with categorical perception. Black and white mountains over darkened city.

How does a brand deal with the false perceptions associated with its product category or industry?

Categorical perception is the psychological property of how we mentally categorize things affects how we perceive those things in the real world. This means a brand’s product or service will have emotions and product attributes that customers will associate whether true or not.

We explain the concept of categorical perception in business in depth in a previous article. We use the mirrorless camera market as a case study of how false perceptions can start, grow and hold back sales of a technologically superior product.

Now that we have defined the problem, what is the solution?

Business owners and brand managers need to fully understand the perceptions of the category their brand lives in. Then, and only then, can they choose to embrace the category perceptions, actively mitigate them, or separate off from the category.

Embrace.

McLaren 570S vs Ferrari 488 GTB with images of both carsIf you talk to customers and do not discover any false or negative associations with the product category, then you can embrace the category and position your product and service within it. If you choose this route, you are best served to position your product or service as the best in quality or value. The industrial design and messaging can be what speaks best to the market; there is no need to go overboard with differentiation.

This may not be the strategy that gets you featured in the Harvard Business Review or your product featured on the home page of WIRED, but you can dry your tears with the dollar bills of the revenue you will be raking in. If you look at your offering honestly and it is incrementally better than the competition, you can play that hand to become the market leader. The MacBook team knows it’s a laptop. The BMW 3 Series team knows it’s a luxury sedan. Coca-Cola knows they sell soda.

Exotic car manufacturer, McLaren embraces the category of exotic supercars. The mid-engine structure and styling beg for people to put their cars in the same category as the cars from Ferrari. They even embrace the perception that these are temperamental and unreliable cars meant to be occasionally driven; the McLaren 570S has a message on the digital gauge cluster showing the owner how many days it can sit idle before the battery drains and it cannot start without a boost (Youtube, Doug DeMuro). Not a feature a middle-class commuter needs, but useful for a billionaire with a garage full of exotic cars. Image of the McLaren 570s gauge cluster with parking days battery meter.

Mitigate.

If you talk to your customers and discover that there are false perceptions that are holding you back from sales, then you need to adjust your product or service and messaging to actively push back against those perceptions.

Below is a list of the most common false categorical perceptions and how we would advise you to respond. This list is not exhaustive, and your identified false perceptions may be much more specific to your category. We discussed how the mirrorless camera market was plagued by false perceptions of poor battery life and image quality and how Sony and Olympus needed to include the biggest batteries and the best optics to mitigate the misperception.

False Perception Offering Adjustment Messaging Adjustment
Poor Quality Six Sigma manufacturing, industry best warranty “Best in quality, backed by guarantee.”
Expensive Transparent pricing. “Less than you would imagine.”
Complicated Simplify using best UX practices. “You don’t need to be an expert to…”
Unsafe / Unhealthy Exceed expectations in independent tests. “We take your health/safety seriously.”
Uncool Market test with people in an aspirational lifestyle. “Celebrity X endorses…”
Uncomfortable Design with ergonomic best practices. “You are never more comfortable than using…”
Undignified Listen to the customer openly. Remove pain points. “We respect you.”

An example of actively mitigating categorical perceptions is how Hyundai and Kia dealt with the reputation of Korean cars. Korean car manufacturers were perceived as being of poor build quality, and it took decades for Hyundai and Kia to dig out of this perception by being on top of the initial quality rankings and offering the longest warranties in the industry. I would speculate their investment was in the hundreds of millions of dollars over two decades to mitigate this perception. This is a big deal to them.

Separate.

There is one other, more risky tactic to avoid categorical perception, and that is to try to separate from the product category altogether and define your own. It is a high risk, high reward strategy.

You create a product category by completely bucking the trends of the nearest category in features, product design, and marketing. But being different for different sake is not good enough. The product category you are moving away from is a category because there is demand for those products, so your adjunct category of one needs to be different in a compelling way.

Developing a compellingly different product happens two ways. One way is that societal trends have moved away from the desires of the customers from what the industry is providing. I have been critical of Uber before, but this is how they have seen their success. The taxi industry was so entrenched, exclusive and slow moving that it failed to react to two societal trends: mobile apps and the gig economy. So in slides Uber and Lyft to create a new product category of ride sharing, and being a new category meant they were able to sidestep the regulations as well.

The second way a compelling product is born is that a technological limitation has been removed at a reasonable price point. There were MP3 players and multi-gigabyte hard drives before the iPod, but Apple was able to purchase the hard drives on mass to get to cost down to a market accepting level. If you can remove a technological barrier at a reasonable cost, then you can create your own product category.

It is important that your change the industrial design, packaging and messaging so much that it does not draw comparisons with the closest product categories.

BMW is not shy about wanting to create a new product category: “[a]t BMW i, this change in mindset has led to a new era in which, for the first time ever, vehicles are developed from the ground up with sustainable mobility in mind.” (BMW i online brochure.) The BMW i3 and i8 are dramatically different than other vehicles concerning technology: they are electric vehicles with gasoline motors that run generators for extended range. BMW has matched that difference with dramatically different styling. In contrast, Toyota failed to create a new product category with the Prius because the design of their first generation looked like their Echo model. Now, hybrid technology is simply an option for the existing gasoline car category.

BMW i Brand logo with BMW i8 and BMW i3 cars

If you successfully create your own category, you are in a high growth environment because you have no competition. David Aaker in his book “Brand Leadership” makes the point that all big brands we know today grew to household names when they had a new feature or societal trend that separated them into their own category for a period of time. For example, the iPhone became in a class of its own for years by introducing an all touch screen device, and in so became the dominant smartphone manufacturer and hasn’t relinquished that title since.

If, on the off chance, you are successful in creating a new category, understand that other manufacturers will follow you into that new category. Dyson put a much more powerful motor in a vacuum cleaner and took away the suction robbing filter, and they styled their vacuum cleaners completely differently than the industry to say ‘this isn’t a regular vacuum cleaner.’ But fast forward a decade, and all the vacuum cleaners in the market look like Dyson vacuums. Thankfully, they have built a great brand in the meantime.

Conclusion

After reading this article, you may be all charged up and follow the “separate” strategy. But it is important as a marketer and business owner to be realistic about where your offerings lay relative to the competition. New features that you perceive as mind blowing may be considered iterative to the market. Have honest conversations with your customers or potential customers to see if your product is perceived the way you think it is.

Black and white photo of Colin FinkleColin Finkle is a brand marketer and designer with ten years of experience helping Fortune 500 companies tell their story at retail. You can see his work at Colin Finkle’s portfolio site. You can connect with him on LinkedIn or Twitter. He is also the author of the book series, the Neverborn Saga.

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