Wednesday, July 02, 2025

D2C brand Playbook - Part 3 - Building your first product - Should it be a Premium or a mass offering?


Y
our First Product - Should you start at the bottom end and create an affordable offering Or start at the top and create a premium offering?

The answer lies in the category type!

1. When your category is well established (mature)...

....you need a product that serves an existing need but with "strong differentiation" (for efficiency in market peneteration) else it would end as a me-too product:

- You can build it at the bottom end to play on volumes.

- You can build it at the top to play on exclusivity.

>>>Where you start doesnt matter here!


Eg:
Mass
Deodorants - Fogg (differentiation of no gas)
Shampoo- Chik (differentiation of 1 Re Sachet packaging first time)
Car - Nano (differentiation of 1 lakh price tag)

Premium 
Fashion - Rare Rabbit (premium fabrics with minimalistic designs)
Soaps - Sebamed (differentiation of ph 5.5)
Car - Ford Ecosport (First compact urban SUV)


2. When your category needs category creation work (new)...

....you need a product that first needs to create/educate about a need by building differentiation for the category itself (market development):

- You should build it with a premium+feature packed offering first to establish differentiation with magical benefits accrual (post purchase) that catches a small cohort (early adopters)'s attention first!

- Early adopters are experimentative folks who need "inspiration" to pick you not affordability!

- Building a new category with affordable but non-magical benefits, run risk of non-adoption of the category itself.

- Gradually, to target masses, then you create affordable simpler products.

>>>New categories need the strongest premium magical offering first!


Eg:
Touch phones - Iphone
VR headsets - Vision Pro
EV 2W - Ather 450x/Ola S1 Pro

Do you believe, new categories can be built with affordable not so inspiring products?