I’m returning from giving a keynote talk in Europe on different types of marketing myopia, and gave some thought this week to category myopia.
There’s a famous Jeff Bezos quote attributed to an early Amazon shareholder letter:
“We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs, and then we work back from there.”
In contrast, many companies start with whatever the competition is doing, and use that as their north star. For all the talk about customer obsession, the priorities of many companies reveal themselves to be “competitor obsessed, customer aware.”
Gary Rogers, the legendary former CEO of Dreyer’s Grand Ice Cream, used to refer to this type of competitor obsession when I worked there as “watching worm races.” The worm races refer to the squiggly worm-like market share lines that shows how brands are tracking against their competition. He said business leaders who focus too much on watching worm races miss the big picture.
Instead Gary urged teams to focus on consumers and customers. And with that focus, Dreyer’s ultimately won the worm races too. Dreyer’s grew from a regional ice cream brand to a dominant position in the US before selling to Nestle to serve as the key plank of their global ice cream business.
Competitor fixation can also cause us to miss how people actually view the categories we work in. When I worked on the Cheerios brand, we talked about our category by its Nielsen category term, “RTE Cereal”. RTE stood for “Ready-to-Eat Cereal”, an outdated term initially conceived because it was distinct from cereals like oatmeal, which had to be cooked.
But no actual consumer thinks of cereal that way. They may choose Cheerios against all sorts of options, from yogurt to Starbucks to Noah’s bagels. And by obsessively tracking the market share of RTE Cereal, we can miss the big picture.
Understanding the market is important. But ultimately, the winning balance is to be “customer obsessed, competitor aware.”
Here are a few related cartoons I’ve drawn over the years:
