Unpacking the Success of Microsoft Office in Category Design

On this episode of Lochhead on Marketing, Christopher Lochhead, a three-time CMO and a leading figure in category design, gives his Pirates Perspective into the critical concept that “the category makes the brand, not the other way around.”

This principle underscores the importance of understanding and defining a category in marketing, as it can profoundly influence consumer perception and the overall success of a brand. Through engaging stories and practical examples, Christopher illustrates how effective category design can lead to market dominance. Additionally, Christopher highlights Microsoft’s strategic shift in the tech industry, emphasizing the importance of a unified category approach.

Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.

Understanding Category Design

Category design is a strategic approach that involves creating and defining a new market category, thereby positioning a brand as the leader within that category. This concept is pivotal because it shifts the focus from competing within an existing market to creating a new space where the brand can dominate.

Christopher emphasizes that successful brands are those that not only understand their category but also actively shape it.

The Category Shapes the Brand

Christopher’s central thesis is that the category makes the brand, not the other way around. This means that the success of a brand is largely determined by how well it defines and owns its category. By focusing on the problems they solve and the experiences they create, companies can differentiate themselves and achieve lasting success in their respective markets.

Case Studies: Barcade and Qualtrics

Christopher then shares compelling examples to illustrate the importance of category design. One notable example is Barcade, an innovative arcade bar that successfully carved out its niche by blending the nostalgia of classic arcade games with a vibrant bar atmosphere. By defining its category clearly, Barcade attracted a dedicated customer base and differentiated itself from traditional bars and arcades.

Another significant case study is Qualtrics, a company that transformed its market position through a focus on experience management. Christopher contrasts Qualtrics with its competitors, such as Medallia and SurveyMonkey, to highlight the impact of effective category design. While Qualtrics successfully defined and owned its category, the other companies struggled to differentiate themselves, leading to varying degrees of success in the marketplace.

Microsoft’s Journey

Christopher recounts the story of Microsoft and its journey to dominate the office productivity software market. Initially, Microsoft faced fierce competition from established players like WordPerfect in word processing, Lotus in spreadsheets, and dBase in databases. Despite launching competitive products, Microsoft struggled to gain significant market share.

The turning point came when Mike Maples Sr., a key figure at Microsoft, discovered an anomaly in sales data during a trip to Australia. He learned that bundling applications together and offering them at a discounted price led to a significant uptick in sales. This insight prompted Maples to rethink the problem: instead of viewing these applications as separate categories, he recognized that they collectively addressed a larger issue—productivity for office workers.

To hear more about Christopher Lochhead’s Pirate Perspective on Brand and Category Design, download and listen to this episode. You can also check out more Pirates Perspective at Category Pirates.

Don’t forget to grab a copy (or gift!) of one of our best-selling books:

•  Snow Leopard: How Legendary Writers Create A Category Of One
•  The Category Design Toolkit: Beyond Marketing: 15 Frameworks For Creating & Dominating Your Niche
•  A Marketer’s Guide To Category Design: How To Escape The “Better” Trap, Dam The Demand, And Launch A Lightning Strike Strategy
• The 22 Laws of Category Design: Name & Claim Your Niche, Share Your POV, And Move The World From Where It Is To Somewhere Different
•  **NEW!** The B2B Tech Marketer’s Guide To Category Design: How To Engineer Your Market, Find What Makes You Different, And Become A Category Queen

We hope you enjoyed this episode of Lochhead on Marketing™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, X (formerly Twitter), Instagram, and subscribe on iTunes and Spotify!