What is a Category Killer?

Category killers are brands that enjoy such a high demand from consumers that they leave little, if any, room for competitors to secure a portion of the market. A category killer may be a company, such as a retail store, a brand name, or even an individual product or service. In some industries, regulations help to minimize the chances for this type of monopoly situation, while others have no such regulations; this paves the way for an emergence of a single entity that handily drives the competition out of business.

One example of a category killer is a retail chain that becomes so popular that other chains as well as local businesses are unable to attract a sizable portion of the buying public. Sometimes referred to as a big box store, these retailers are able to provide lower prices for the goods and services they sell, simply because they can afford to buy in bulk lots that are much larger than what smaller competitors can manage. The end result is that locally owned businesses are often uneasy when a big box store is built somewhere in the vicinity, since it means that local businesses will be reduced to servicing niche markets, or go out of business altogether.

A category killer can also be a product that becomes so popular that the brand name itself becomes synonymous with the product itself. As a result, many consumers pay little to no attention to any competing products, reaching almost automatically for the brand name product. A phenomenon of this type often takes years to create, but once the brand name is firmly lodged in the minds of consumers, it is almost impossible to undermine the control of that product in the marketplace.

There are some benefits to the development of a category killer. As applied to companies, the category killer can often provide products and services at significantly lower prices than the competition. For consumers working with limited household budgets, this means they are able to purchase more of what they need without actually spending any more money. Many households of varying income levels flock to the big box stores out of the necessity of making their available financial resources stretch a little further.

The downside to a category killer is that it minimizes choices for consumers, in terms of where they can shop. As a category killer emerges in a given market, the first competitors to suffer are usually locally owned businesses. Unable to compete, many simply shut down. This type of situation has led some communities to actively oppose the construction of big boxes in their cities and towns, as a way of preserving the idea of choice for consumers and free enterprise for business entrepreneurs.