The Power of Brand: Insights on Launching New Products or Product Categories

In the consumer goods market, the allure of being first to market with a new product or category is strong, but it doesn’t always lead to long-term success. I wanted to offer a few points of the intricacies of brand power, the impact of larger brands, and strategic considerations for startups.

Being First to Market Doesn’t Guarantee Category Founder Status

Being first to market can seem like a clear path to becoming the category leader, but this isn’t always the case. History shows that it’s not enough to be first; you must also establish a strong brand connection with consumers (a community) and a unique value proposition (UVP).

Take Red Bull as an example. While it wasn’t the first energy drink, it became synonymous with the category due to its strategic branding and marketing efforts. This demonstrates that establishing a lasting consumer connection is crucial for being recognized as a category founder. They were at the events, energizing and activating people. They won on authenticity.

Larger Brands Can Eclipse Early Movers

Even if a company pioneers a new product, larger, established brands can overshadow it by entering the market later. These big players have the advantage of significant resources, established distribution networks, and strong brand recognition.

This truth reared it’s head strong over the past week in my LinkedIn feed.? About 4 years ago we started a project with one of the market leading weighted blanket companies, to bring to market a collection of weighted jackets and hoodies to help people feel the same calming effects that their blankets had. It took a long time to engineer how this could be done to look like a regular down jacket or hoodie, let alone doing it through Covid when we were unable to go to the factories to work through the product development.

Cut to the chase, Pyvot Weighted apparel launched about 18mo ago, and although they had some great write-ups in Shape Magazine, Gear Junkie and others, the brand has had a slow growth.

Fast forward to last week, when Hanes, under the Champion Brand came out with a weighted hoodie, very much alike the Pyvot weighted hoodie, and instantly was given recognition for the innovation and forward thinking, as well as dubbed first to market.? Even with the years of efforts and large investment into the development, production and marketing all to be shadowed by the Hanes Brand, Pyvot owner Adam Levinsohn was supportive and enthusiastic about Champion paving the way for the category and making it more accessible to more people in need.

Is It Worth Being First to Market?

Startups face a strategic dilemma: should they strive to be first to market or let larger brands establish market demand first?

Being first offers advantages like setting industry standards and building early customer loyalty, but it also involves significant risks and costs. Startups must invest heavily in consumer education, marketing, and infrastructure to establish a new category, all while competing with potential future entrants.

Conversely, waiting allows startups to learn from larger brands, identify market gaps, and develop a refined offering. This strategy is less risky and more cost-effective but requires careful timing to avoid being perceived as a follower.

The Costs for a Startup to Be Heard in a Crowded Marketplace

Breaking through the noise in a crowded marketplace is challenging and costly for startups. Marketing expenses are substantial, covering digital campaigns, social media engagement, traditional media placements, and influencer partnerships. Additionally, investments in market research, product development, and customer service are crucial for differentiation.

Beyond financial costs, startups must navigate brand positioning and differentiation. In a saturated market, finding a unique value proposition and effectively communicating it is essential. This involves highlighting unique features and crafting a compelling brand story that resonates with target audiences.

End notes

Brand power in the consumer goods market is immense. Being first to market doesn’t guarantee success, as larger brands can quickly eclipse early movers. Startups must weigh the risks and costs of pioneering a new category against the benefits of allowing larger brands to establish demand first.

Ultimately, the decision should be guided by market dynamics, competitive landscape, and the startup’s strengths - namely in Story, Product Differentiation and building a Brand Community . Success in the consumer goods market isn’t just about being first; it’s about being memorable, relevant, and capable of capturing consumers’ hearts and minds. This is the true power of brand.