Creating Market Penetration for New Products and Businesses: Category Strategy and Category Branding to Become the Preferred Choice | Insights

Many companies struggle to build sufficient awareness after launching new products or brands, resulting in stagnant sales. In established markets, competition is intense, and differentiation based solely on features or price—along with advertising designed to highlight those differences—is often no longer enough to earn a place in consumers’ consideration sets. Moreover, as consumer purchasing behavior and values continue to diversify, traditional market segmentation and standardized messaging frameworks often fail to fully capture how consumers make decisions.

In this insight, we focus on "category strategy" as a critical perspective for enabling new brands to become the preferred choice under such conditions, and we introduce category branding as a practical approach to winning market share. Starting with a redefinition of the "market universe" from the consumer’s perspective, we explain practical approaches with concrete examples, covering how to define consumer decision criteria, how to elevate topics into public discourse, and awareness expansion through strategic PR.

About the Author

Yoshinao Shimizu

Principal
Josuke Watanabe

Director

Why Do "Good Products" Fail to Sell? The Reality of Strong Products That Get Lost in the Market

Have you ever encountered situations like the following when launching a new product?

"We launched a new product or brand, but it is difficult to gain awareness."
"We launched a new product and got it onto store shelves, but it still failed to gain traction and sales never took off."

Even if the product itself is a very "good product," and even if there is a high likelihood of continued use once consumers try it, the fundamental issue is that they do not try it in the first place. In an effort to gain awareness, companies may attempt mass media advertising such as television commercials or out-of-home advertising, but unless they invest an enormous budget and execute on a large scale, such efforts tend to be short-lived, with little lasting impact and no meaningful lift in sales.

In many cases, the root cause lies in the fact that the market in which the company is competing is already saturated and crowded with competitors, leaving very limited room for new product entry. In addition, there are cases in which the newly added functions, uses, targets, or other aspects of the product concept and features are not known or recognized at all. Many people in charge may feel pressure from within their organizations, being told that addressing this situation is the job of the marketer or the role of the product manager.

In an attempt to break through such circumstances, companies often focus their marketing communications on a product-out perspective, emphasizing points of differentiation from competitors, such as "higher functionality than other companies’ products," "lower price," "unique features," or "used by celebrities," and concentrating on how to communicate their own distinctive characteristics.

Of course, when a brand manager is responsible for a commoditized product and faces the challenge of how to make that product market-oriented and maintain the sales of the brand portfolio, such approaches are necessary and important. However, on the other hand, if the objective is to pose a new question to society through the product, or to build a large share within a commoditized market, it is obvious that breaking through with communication alone requires an enormous cost.

Category Strategy as a Breakthrough

Rethinking What the Market Really Is

So how can companies transform this situation and successfully bring their truly "good products" to market? Effective methods here are "category strategy" and "category branding."

Category strategy is an approach in which a company defines and creates the category—in effect, the market—in which it intends to compete. Rather than simply entering an existing market, companies reexamine the market they compete in from the perspective of "where the market is to begin with," introduce new decision criteria within that market, and create a new category (that is, a new market). By then disseminating that way of choosing, companies enable their products to be recognized as a unique presence in that market. This process is known as "category branding" (Figure 1).

The key point here is to create a new "category" that can be recognized either within an existing market or separately from existing markets. In doing so, companies establish new decision criteria that allow their offerings to stand out or become the only viable option, and carve out those criteria as a category.

Below are representative examples of category branding.

Representative Examples of Category Branding

Case Study A: Creating the "Energy Drink" Category

A certain beverage brand created a new market by positioning itself not as a "nutritional drink consumed for fatigue recovery," but as an "energy drink consumed when you want to feel energized." In the traditional nutritional drink market, major brands had formed the market over many years by making proposals centered on functionality, such as being pharmaceutical products and containing ingredients like taurine, aimed at helping businesspeople recover from work-related fatigue.

Against this backdrop, the brand presented the concept of "energy"—not "recovery," which returns a negative state to zero when one is tired, but rather elevating zero to one, ten, or one hundred through nutritional drinks. In doing so, it established new decision criteria between "fatigue recovery" for salaried workers to keep working and "energy" for young people and those who take on challenges.

To bring this positioning to life, the brand developed a set of highly visible brand activities that allowed fans to experience market change firsthand. For example, through sampling and consumption suggestions at clubs and bars, and through sponsorship of events that attracted small but highly enthusiastic fan bases, such as extreme sports competitions and music events, the brand enabled consumers to experience its worldview. The brand communicated that it was for people who want to enjoy themselves more and elevate their mood, and sought to establish recognition as "a beverage for challengers and trendsetters."

Through these initiatives, the brand successfully embedded the new "energy drink" category into the market, established a positioning distinct from traditional nutritional drinks, and significantly expanded sales. This is an example of achieving substantial growth in a short period through category branding.

Case Study B: Creating the "Dietary Fiber" Category

A certain food ingredient manufacturer capitalized on the growing social narrative that beauty begins with detoxification through diet and perspiration, and elevated the idea of "improving the intestinal environment for beauty and cleansing the body from the gut" into public discourse. Rather than positioning the value of dietary fiber as "constipation prevention" or "constipation relief," the company proposed the concept of "dietary fiber detox," positioning dietary fiber as a means of supporting beauty by improving the intestinal environment and creating a new market.

In this initiative, the company introduced the concept of an "unhealthy gut," defined as a state in which waste accumulates in the intestines even when a person is not constipated, and promoted the idea that "detoxification" can be achieved through dietary fiber intake. Furthermore, it advocated a lifestyle of easy, everyday internal cleansing, and is considered to have been a precursor to trends such as "gut health activities."

In addition, because pharmaceutical and medical device regulations restrict the direct promotion of effects and efficacy when bringing this issue into public discourse and disseminating keywords such as "improving the intestinal environment leads to beauty," the company developed evidence through experts, established academic organizations related to dietary fiber, and designated commemorative days. Through these efforts, it accumulated factual support that gut health leads to beauty and deployed strategic PR to ensure that "dietary fiber detox" became known to the media and the public. At the same time, it created a common logo that could be used at points of sale and collaborated with various companies to launch products themed around dietary fiber detox during the same period. In stores, it developed promotional events that transcended category boundaries, and through coordination with media—particularly women’s magazines—it gained awareness within the contexts of "gut health" and "beauty."

As a result, the manufacturer went on to receive a public relations award grand prize that was unprecedented for a food ingredient manufacturer.

As these examples illustrate, category branding involves establishing decision criteria through category strategy such that a company’s product characteristics stand out and become more likely to be chosen over other brands. It then involves elevating that way of choosing into public discourse, gaining societal awareness, and achieving a state in which the company is widely recognized as the leading authority in that category.

Redefining the Market Universe for Category Creation

Reexamining the Market from the Customer’s Perspective

So what does it mean, in concrete terms, to reexamine the market? The concept that becomes important here is the "market universe." The market universe refers to redefining the market as a whole from a new perspective based on the customer’s point of view, rather than on traditional industry practices, channels, shelf allocation, or zoning.

Typically, markets are defined for the convenience of sellers. For example, candies and tablets may be segmented based on product properties or messaging, such as "fresh breath," "snack-like," or "salt replenishment." Shelf allocation in stores is also often driven by management-oriented classifications such as "snack shelves" or "bread shelves."

However, actual consumers choose products from perspectives that differ from these seller-defined classifications. For example, when purchasing lunch, young men may move back and forth between shelves, choosing among rice balls, bread, prepared foods, frozen foods, and hot snacks. Meanwhile, women may choose combinations of light meals such as salads and soups. In other words, consumers select products based on "occasions (usage scenes)" such as "lunch," "breakfast," "snacking," "wanting a hearty meal," or "wanting something light."

By reexamining the market starting from product usage in occasions defined by consumers’ life scenes and needs, new perspectives emerge that are not bound by traditional market definitions or classifications. This is the concept of the "market universe." Within these newly identified markets, category strategy is fundamentally about defining new decision criteria and deciding which existing markets or categories to win share from. Spreading awareness of that category is the core of category branding.

Conventional marketing has centered on designing initiatives based on frameworks such as the four Ps or three Cs, focusing on how to differentiate from competitors within classifications fixed by industry definitions and distribution. Even when exploring customer insights, the focus has often been on personas and purchase processes, and even with methods such as observational research or in-depth interviews, perspectives related to time and occasions have tended to be insufficient.

Redefining the market universe means going beyond these conventional frameworks to expand "the market in which the company should compete," drawing an "occasion map" aligned with customer usage occasions, and redesigning the positioning of products and brands within that map. This makes it possible to discover new market opportunities that were invisible from a seller’s perspective.

What Is White Space in the Market Universe?

By redefining the market universe, companies can identify the existence of "white space." White space refers to market areas within customer occasions that are not yet adequately addressed or where existing brands have not secured positions. Identifying and carving out these areas is the way to capture new markets within the overall market universe (Figure 2).

What is important is the reality of "what this product or brand is for" as perceived by consumers.

In a certain beverage category, the market had traditionally been formed around beverages for "fatigue recovery." In reality, however, there were also uses in different occasions, such as "drinking before going out for drinks" or "drinking before going to a club." Despite this, products were uniformly sold as "nutritional drinks." In such a situation, attention was paid to the absence of products addressing the occasion of "drinking to charge energy," and a new market was carved out there, as in the aforementioned energy drink example. By presenting new decision criteria for beverages that "elevate zero to one hundred," rather than "returning negative to zero," the brand clarified the white space and established its position as the only brand in that area.

To identify white space in the market universe in this way, it is essential to understand which positions each brand occupies on the redefined occasion map. From there, by taking a bird’s-eye view of the market and identifying white space, companies can define new decision criteria, shape perceptions of what that category represents, and shift the position of their own brand on the occasion map.

Practical Steps for Category Creation to Build a Winning Playing Field

How to Define Decision Criteria and Set Strategy

So how should category branding be advanced in practice? The first step is defining the key decision criterion.

In this case, using a certain food product as a subject, cluster analysis was applied to map the relationship between products and customer occasions (moods and demands related to eating and drinking). Specifically, correspondence analysis was used to visualize "which categories or brands are perceived as best fitting which occasions," and positioning maps were created (Figures 3 and 4).

As a result, several clusters emerged, clarifying where each brand was positioned. This visualized the gap between the positions intended by sellers and the perceptions actually held by consumers, revealing the occasions in which consumers choose products.

Based on this, repositioning of existing brands and the introduction of new brands were considered. For example, if there are no competitors in the upper-right area, and there is demand despite the absence of the company’s brand, a strategy can be formulated to target white space by introducing a new product there. Alternatively, if the company’s product is positioned in the lower-right area but does not fully cover the market, a strategy to reposition within that area can be developed (Figure 5).

By mapping competitors’ and one’s own positions across the entire market universe and understanding which areas are vacant and where overlaps exist, it becomes possible to identify the occasions that should be strategically targeted.

What is important is not simply fitting into existing classifications such as a "light meal zone," but clearly defining "which occasion to target" within the market universe and designing advertising and communication that align with that context.

Even for items that "quench thirst" or "satisfy hunger," occasions and motivations differ depending on the situation and the reasons behind those desires. Identifying those differences and defining a clear decision criterion there is the key to building a winning playing field.

To define this decision criterion, it is first necessary to clarify the company’s strengths, namely the brand’s "value proposition." Then, identifying the broader societal theme where that value is most compelling becomes the next critical step.

Practicing Category Branding Through the Use of Social Issues and Media Strategy

After defining that decision criterion, what becomes important is the perspective of strategic PR—namely, how to expand it into society.

Strategic PR refers not only to working with media, but also to creating mechanisms that present new perspectives or issues to society as a whole and stimulate public interest and discussion.

For example, companies can work with experts or third-party organizations to establish new associations, providing endorsements that communicate the usefulness and importance of the category’s characteristics. They can also build narratives aligned with government manifestos or policy directions, positioning the act of choosing that option itself as socially correct, and disseminate this through media coverage. Furthermore, rather than creating a category alone, companies can collaborate with peers and distributors to jointly develop products and shelves, making the category itself a new proposal for consumers. Through such multifaceted approaches, it becomes possible to create markets that involve society as a whole, rather than merely promoting products.

The aforementioned food ingredient manufacturer, from this strategic PR perspective, captured the trend of growing interest in beauty and disseminated the message, supported by evidence, that "skin problems occur because the gut is dirty." In doing so, it did not merely propose the new concept of "dietary fiber detox," but also framed "a dirty gut" as an issue in public discourse, along with the notion that "gut health activities are necessary."
By working with media around this issue in public discourse and having it featured under the theme of "gut health activities," the company created a flow in which awareness of "gut health activities and dietary fiber detox" led naturally to recognition of "the company’s brand that can solve it." Furthermore, by establishing an "academia" as a platform for expert information dissemination and providing technical evidence, the information came to be widely recognized as highly credible.

In this way, companies first redefine the market by occasions and identify white space. Then, they define decision criteria that leverage their value proposition and connect them to issues that can resonate in public discourse, deploying strategic PR. By embedding that way of choosing in society, rather than promoting the product alone, they create new markets and establish a position in which their brand is number one within that market.
This two-step approach is the category creation strategy and the method known as category branding.

Category branding is a strategy for establishing a number one position by reexamining the market universe from the consumer’s perspective, introducing new decision criteria, and creating the category itself. To achieve this, the use of strategic PR rooted in issues that can resonate in public discourse is effective, and further collaboration with other companies, government bodies, and financial institutions makes it possible not only to gain category awareness but also to generate business expansion.

While this insight has focused primarily on examples from consumer goods such as energy drinks, dietary fiber, and food products, this framework can be applied in the same way to business-to-business products and service industries, such as building materials, hotels, restaurant chains, and pharmaceuticals.

ABeam Consulting supports clients end to end in creating new markets through category strategy—from building and executing category branding to designing strategic PR and enabling collaboration with co-creation partners.

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