Some stories are so strong that they are bound to repeat across categories. This is one of them.

#1 creates a new category. He may not be the first one to come up with the idea or the product, but is the first one to leverage it for mass market.
#1 learns how to tell the market about the new product, #1 teaches people that it is good, and eventually many people are convinced. Maybe #1 even comes to stand for that idea or product. Their brand is the strongest in the category by far, there may be some small players pitching similar products, but they can’t touch #1. #1 is the one who teaches the market why the entire category is good, why it works, why it is important.
Everything is fine, until, one day, #2 comes to town.

#2’s product isn’t as revolutionary as #1’s. Maybe there’s a twist on the original idea somewhere, but sometimes that twist is more in the way they communicate about the brand. You see, #2 are quite happy with the fact that #1 is synonymous with the category, because it means #1 stands for values & attributes that are generic and shared by every player in the category – big or small.

Ironically, it is the fact that #1 built the category and told everyone what it was all about that made them generic and vulnerable.

This will be especially true if the category has commoditized in the meantime.
This gives #2 a chance to look at the category and either find out what it is “really” about or make a claim regarding what’s important. Anyway, #2’s claim comes off as strong, especially if it is emotional in nature, mainly because it is focused, and different, and that makes #1’s loyal customers pay attention.

Before you know it, #2 is a serious threat to #1’s domination of the market. They get a bigger and bigger share of the cooler, more unique aspects of the category, and their popularity accelerates.

At this point, the story usually goes down one of two paths:

• #1 doesn’t realise what’s happening quickly enough and before you know it they start being perceived as dated and boring. They lose their #1 position forever.
• #1 wakes up in time to reposition themselves, using their more established heritage to make a more emotional claim that they are the real thing. Even then, life will not go back to being as easy as they used to be.

The lesson for established brands is to watch out for that moment when what was once an innovative message becomes obvious, and try to stand for something unique even before the need to differentiate is pressing. If a new player plays on difference, it’s time to find a fresh way to reclaim your heritage.

The lesson for contenders is to try and isolate the area where the leader created a standard and has become generic, or find a unique story, that is in the heart of the category and which they can become to stand for quickly.

Easier said than done? Sure. Complete solutions will take much planning and hard work, but the point is the value of recognising the narrative pattern of this plot and using it for your benefit.

“Historic” Examples: Coca-Cola & Pepsi, Motorola & Nokia, Creative & iPod, possibly Friendster & Myspace. I’m sure you can come up with more.
To the Israelis in the audience: Orange vs. Cellcom, Yoplait vs. Danone, Tzabar & Achla

Next: Stories so powerful they define categories, or even markets.
Previously: Marketing-stories, and stories about stories.

Technorati Tags: storytelling, marketing, narrative, plot, differentiation, positioning