Skip to main content

Subcategory Competition could help firms deliver high sales; think Chobani!



In the future, branding and business in general is
going to involve more subcategory creation and
competition and less “my brand is better than
your brand” competition. This is because, with
rare exemptions, that is the only way to achieve
real profitable growth. In category after category,
real growth results not from market share
increases, but from brands that have created a set
of “must haves” that define a new subcategory
and then manage that subcategory by becoming
its exemplar. These brands continue to innovate
and create a moving target. By managing the
perceptions and attitudes toward the subcategory,
the subcategory wins.
I’ve previously discussed in my blog and my
book, Brand Relevance a host of examples of
brands that have created subcategories and won a
subcategory battle. The Chrysler minivan, Asahi
Super Dry, Enterprise-Rent-a-Car, Muji (the no-
brand retailer), Patagonia, Zipcar, Tesla, Red Bull,
IKEA, Gillette razors in India, the list goes on and
on. Most recently, I discussed Whole Foods
Market. Chobani, recently written about in
Marketing News, is another good example.
Mamdi Uludaya, a native of Turkey and the owner
of a small cheese business, bought a former Kraft
yogurt plant in New York in 2005. His goal was to
produce Greek yogurt, back then a miniscule and
unnoticed part of the yogurt scene dominated by
Yoplait and Dannon. He named it “Chobani,” and
in just over five years, was making 1.4 billion
dollars. The share of the yogurt market held by
the Greek subcategory went from 0.7% in 2006 to
52% in 2014. The Greek subcategory won.
Four observations about Chobani’s achievement:
First, the product has a distinct value proposition.
It’s thicker, which makes it have a richer,
creamier texture. With the same amount of
calories, it usually has twice the protein, half the
sugar, and half the carbs as regular yogurt. That
has an appeal to those interested in high protein
diets as well as those that want or need to avoid
meat. The low sugar, carb, calorie counts are
valued by anyone into health or trying to lose
weight.
Second, Chobani created a unique package
design. Their cup was shorter and fatter than the
prototypical yogurt container and displayed vivid
colors. That provided a symbol of the new
subcategory that helped customers recognize
which option was Greek. It also provided the self-
expressive benefit of knowing that what you are
buying and eating was the authentic Greek yogurt
with all its attributes.
Third, Chobani positioned itself as a subcategory
and not as a specialty product. It wasn’t to be
used only by those that would want a niche,
ethnic product. That enabled the brand to become
a mass product with appeal to a broad segment.
Fourth, Chobani fought back. When its rivals,
particularly the big players Dannon and Yoplait,
attempted to become relevant Chobani leveraged
its exemplar position by innovating and framing
the subcategory. As a result, the upstart Chobani
still retains a 40% share of the Greek yogurt
market.
Chobani innovated. It now offers a 100-calorie
version (Simply 100), a flip yogurt with added
toppings such as blueberries, a breakfast line
labeled Chobani Oats, a line of seasonally inspired
yogurt flavors called Chobani Indulgent, a line of
dips, and a full-fat yogurt in large containers for
cooking and as a substitute for sour cream. They
have even opened retail cafes that stock more
exotic versions of their product.
Further, Chobani framed the subcategory to
include natural ingredients, where Chobani has an
edge. Their “How Matters” campaign highlights
the Chobani production process and will become
a theme of a larger campaign about how
important process is when training for the
Olympics, as well as making yogurt.
How could the two dominant yogurt brands sit by
while a newcomer with very limited resources
grew to a 1.4 billion business in under six years?
It’s an amazing story, but the answer is familiar.
The dominant players were engaged in vigorous
“my brand is better than your brand” competition
and were focused on winning share points in a
static category. And they were successfully,
steadily growing profits. But this new subcategory,
that in their mind was worth less than 1%, was
not worth investing in because they believed it
could not materially affect their business.

Comments

Popular posts from this blog

What is Biri marung?

Biri marung" is a term in Chewa/Nyanja, a language spoken in Zambia, Malawi, and parts of Mozambique. It directly translates to "hyena in the sky" or "flying hyena.  It is often used in folklore and traditional beliefs in African cultures to refer to supernatural beings or mysterious occurrences, particularly those associated with witchcraft or spirits. In music, "Biri Marung" is a popular Amapiano track released in November 2024 by South African artists Mr Pilato, Ego Slimflow, and Tebogo G Mashego, featuring Sje Konka, Focalistic, DJ Maphorisa, Scotts Maphuma, and CowBoii.  The song has gained significant attention, with its official audio available on YouTube.  Additionally, it has been featured on various music platforms, including Apple Music.  The track has also inspired dance challenges and covers on social media platforms like TikTok, contributing to its viral status.  "Biri Marung" has been recognized for its impact in the music industry...

The world needs the Gifts and Skills that only you have

 TAP THE UNTAPPED. RELEASE THE RESERVOIR. Learn more at the Ransford Online School. Your life has the potential to fulfill your purpose. If, however, you imprison that potential, you rob your life of its purpose and fulfillment.  You and every other individual on this planet possess an awesome treasure. Too much of this treasure is buried every day, untapped and untouched, in the cemeteries of our world.  Much talent, skill and creativity have been lost to the world for want of a little courage. Many obscure men and women enter eternity pregnant with potential, with a still-born purpose. Living with ability brings responsibility. Dying with ability reveals irresponsibility. Everything in creation was designed to function on the simple principle of receiving and releasing. Life depends on this principle.  What if the plants refused to release the oxygen they possess or if we human beings refused to release the carbon dioxide we produce?  The result would be chaos...

Worldview Matters

Worldviews are rules, values, beliefs and biases that an individual customer brings to buying situation.  If Jude got completely screwed the last time he bought a car from a used-car salesman, the worldview he has when visiting a dealership four years later is a little different than that of someone who is buying her third car in four years from the same place. If Nkechi sees her job as purchasing agent for a big company as one where she should avoid risks, she’ll view that new salesperson in her office very differently than if her understanding of her job is that she should cut costs by innovating and trying new alternatives. Different people, different worldviews. People can see the same data and make a totally different decision. Worldview Affects What's bought ! People don’t buy what we sell. They buy or want to buy what it will do for them. They want the way it will make them feel. What we sell is a means to an end. They are roads to achieve...