© DirectionGroup 2013

Challenger Brands

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It’s not how big it is….

Common misconception is that challengers are small in size…not true!

Challenger is a mentality, it is a mindset. Not girth. Not breadth.

Challenger Brand Mentality

Challenger Brands share these attributes:

State of Market: They’re not the #1 brand and not a

niche player

State of Mind: They have ambitions that exceed their

conventional marketing resources

Rate of Success: They are succeeding, not merely

ambitious or arrogant

Challenger Brands understand that:

The market leader is already top of mind.

They can’t outspend the leader. The best chance they

have to gain share is by being the mindshare leader.

To win mindshare takes thought leadership.

Everything you need to know about Challenger Brands is in this book! It’s the DirectionGroup Bible!

How to Tell if You’re a Challenger Brand

Do any of these characteristics fit you or your organization?

› Maverick/Risk-Takers/Bold

› Aggressive/Determined

› Self-Aware

› In a Hurry

› Intense/Confident

› Intrusive and Unapologetic

› Thought Leader

› Keen to Fund Marketing and Public Relations

Efforts to Move the Brand Ahead

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If you’ve ticked at least 50% from this list, chances are you are a Challenger

Brand!

International challenger brands

1. Pepsi: Taste of new generation vs. Coke

2. Burger King Make it your way vs. McDonalds

3. Apple: Think Different vs. IBM

4. Virgin: Irreverence, Entertainment vs. British Airways

5. Dell: Direct to Client vs. IBM

6. Domino’s: Home Delivery vs. Pizza Hut

7. Beetle Think Small vs. Ford

8. Avis: We try Harder vs. Hertz

Avis – we try harder

8 credos of the challenger brand

1. Break with your immediate past

2. Build a Lighthouse Identity

3. Become the thought leader

4. Create Symbols of Re-Evaluation

5. Sacrifice

6. Over commitment

7. Enter Popular Culture

8. Become Idea-Centered, Not Consumer-Centered

The 1st Credo: Break with your immediate past

What does it mean?Don’t be afraid to ask “dumb” questions to challenge convention in order for consumers to view your brand differently (e.g. How would Microsoft do it?)

Challenger Brands absolutely ignore the assumptions about the category in which they compete

Challenger Brands must determine new criterion for how value is defined in their category

Challenger brands reject:

• One or other fundamental dimension or driver of their category

• An aspect, dimension or quality that the Market Leader exhibits

• The generally perceived culture of the category

• Some aspect of the way the consumers experience or shop for the product

Examples Dell, FirstDirect Bank

The 2nd Credo: Build a Lighthouse Identity

What does it mean?Developing a very clear, unique sense of who or what you are as a brand/company and why it matters, then projecting that identity intensely and consistently

Challenger Brands develop a very clear sense of who they are and what they stand for

They project that identity so intensely that the consumer is forced to notice them

Challenger Brands over-engineer their products, offering the consumer dramatically superior

performance on some dimension (e.g. price, durability)

“Lighthouse” brands proudly tell consumers where they stand in strong, emotional terms

Examples FCUK, Innocent smoothies, Body Shop

The 3rd Credo – Become the Thought Leader

What does it mean?Break convention in terms of how the brand represents itself (what you say), where you say it (medium), and experience (beyond just talk).

Marketers talk as if there is one leader in every category. But there are two:

1. Market leader– the brand with the biggest share and the biggest distribution

2. Thought leader – the brand that, while it may not be the largest, is the one that everyone is

talking about, that has the highest “sensed momentum” in the consumer’s mind.

Challenger Brands strive to become the thought leader.

They must educate consumers that the criterion for choice as defined by the Market Leader are

not the only ones

Examples Lexus, Virgin Atlantic, Bodyshop

The 4th Credo – Create a Symbol of Re-evaluation

What does it mean?Challengers establish symbols designed to prompt quick re-evaluation by consumers and enhance their view of the brand.

It’s not the big that eat the small. It’s the fast that eat the slow.

Challenger Brands are always in a hurry!

They must act swiftly and powerfully to puncture the consumer’s autopilot and create re-appraisal

of themselves.

Bold, impactful acts or marketing ideas capture the imagination of indifferent consumers

conditioned by the messaging of the market leaders

They often pose startling juxtapositions that prompt consumers to sit up and rethink some of their

assumptions

Examples Dyson, Swatch, Wonderbra

The 5th Credo – Sacrifice

What does it mean?Challengers must sacrifice the assumptions of the market. Laser-focus your target, message, reach, frequency and distribution. Recognize that less can be more.

Challenger Brands make sacrifices because they are single-minded which helps them stand out

Challengers usually have fewer resources in almost every aspect of the business and marketing

mix than the market leader

All secondary and tertiary targets are sacrificed in favor of their one, clear, focused strategy

Examples Southwest Airlines, KiteKat

The 6th Credo – Overcommit

What does it mean?Although you may do fewer things, but when you do you must do them bigger and better!

Ironically brands must also Overcommit on a small number of key activities to succeed

Challengers should anticipate resistance and inertia and by overcommitting attempt to remove

those potential barriers.

Challengers do not succeed through just being committed to challenger status; they succeed

through over-commitment.

Challenger Brands over commit because they have to.

Challenger Brands think about barriers and actively remove them before they occur.

Examples Red Bull, Zappos

The 7th Credo – Enter Popular Culture

What does it mean?Unconventional and bold communications can really cut through and get people talking!

Challenger Brands leverage communication, bold advertising and publicity to appeal to

consumers’ broader social needs.

Challengers create and enjoy strong folklore becoming a reference in popular culture and word of

mouth.

By creating social salience Challenger Brands punch above their media weight.

Examples KiteKat, Boddingtons, Haagen Dazs

The 8th Credo – Be ideas centred, not consumer-centric

What does it mean?Sustain challenger momentum by not losing sight of what the brand is about and can be. Ensure your marketing to reflects this vision.

Success is a sugar rush – it causes brands and people to stop behaving in the way that made

them successful to begin with.

A Challenger Brand maintains momentum by ensuring it is focused on the generation of ideas

that constantly refresh and renew the way the consumer experiences the brand.

Challenger Brands are always on the move, they can never afford to be static!

Examples Head & Shoulders, Playstation, The Independent

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