Question:My company has an innovative new product that doesn't fit neatly into any one product category. Is this a problem?

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We can illustrate the problem you face by trying to answer the following real-life questions: Can Sony position the Playstation 2 as a computer, with game characteristics, rather than position it in a traditional way as a game?

By thinking about this question, we can explore more closely the issue of positioning, which seems to be central to your question. Specifically, you need to understand how consumers "categorize" your product.

In marketing, we know that the knowledge consumer's possess is structured in their minds. In particular, knowledge (say, about products) is structured into categories (actually, there is a fancy name known as "taxonomic categories"). What does this mean? Well, things like products are in the same category if they share similar features, and the features they share are different from the features in other categories. Using the Sony example, a category member (Playstation) has maximal similarities with members of its own category (other game machines) and minimal similarity with members of other categories (say, computers).

Obviously there is a continuum of similarity because the Playstation and computers are not maximally different. In fact, they can be considered as members of an even higher category - say consumer electronics. Nonetheless, consumers may have separate categories for computers and games. In fact, the Playstation may have attained the status as a "prototype" (i.e., the best example) for the game category. Other examples of prototypical brands and categories include Kodak (Film), Starkist (Tuna Fish), Jell-O (Gelatin), and Kleenex (Tissue).

So the problem from a consumer's perspective might be this. If consumers categorize the Sony Playstation as a game, it may be very difficult for it to be repositioned as a computer. So the question you need to think about is how customers will categorize your product. You need to help them cateogize it correctly or they will categorize based on the principles we just mentioned. They will look at your product and its features and look for categories that are similar. You might not want them to put you in those categories, but unless you help them sort it out, they'll do it anyway.

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