What is the fuss about Challenger brands? Are challenger brands able to transform markets and sectors?…
So, what exactly is a Challenger brand?
Is it a number two brand, a small fish, aspiring to be a big fish? Is it a niche brand increasing its strength to become a new niche market leader? Or is it a brand which finds itself in an increasingly vulnerable position, where the only choice is to stay ahead or be swallowed by the bigger fish? Is the aim of every Challenger brand to compete with the market leader?
Marketers following Adam Morgan’s concept of challenger brands place Challenger brands in between a niche and a market leaders. The author of eating the big fish defines a Challenger brands as a mindset with “business ambitions beyond conventional marketing resources”. He puts the rate of success as another specific criteria defining a Challenger brand.
So, what do Challenger brands have in common?
They experience significant and rapid growth through new ways of thinking and ambitions which others might not yet have tried. They create cultures where the employees of the company and their customers tell the brand story and become the brand ambassadors and influencers. The Challenging Brand Project run by Jude Bliss gives an example of Oatly & Sipsmith. ‘Be human, and not a logo’ is one of the phrases at Oatly’s headquarters in Malmo. The Swedish oat drink company underwent a huge re-brand in 2013 transforming from a dull food processing company into a challenger brand with a bigger purpose of shifting society towards a plant based diet. They not only broke out from the vegetal milk category to avoid the competition with other like rice, almond, soya alternative product to milk but they challenged the main competition Cow’s Milk and developed the brand which became the leader of the vegan milk products.
Adam Morgan describes one of the characteristics of successful Challenger brands as ”Intelligent naivety” which means to “do the opposite of what everyone else is doing”.
Zipcar’s mission was not to challenge the car rentals but the car owners, by offering a cheap car rental by the hour.
Fairfax Hall, Co- founder of Sipsmith says that their entire marketing budget is spent on the distillery. ‘“We wanted to offer tours and tastings that would bring people to us and lift that veil on the mystery of distilling” We all know that it has worked! Sipsmith, the independent spirtits company pioneered the craft gin movement in the UK.
BrewDog focused on provocation offering a craft beer experience with attitude to inspire conversation.
Challenger brands have the potential to influence the customers and are becoming new important players in the world of transformation and disruption. A generation of Challengers which changes the status quo can move things quicker than the brand leaders. The common example presented by Marketer’s is Apple which transformed a mobile phone into a smart device. Netflix is an example of the new generation Challenger, challenging the relevance of the market leader and positioning themselves as the right brand for the new generation. Another example of this type of a challenger is Paypal. Many other Challenger brands like Airbnb, Spotify, Uber, Innocent are now recognised and categorised as market leading disruptive brands.
There is an emerging trend for visionary Challenger types which aim to challenge an existing business model or ideology. They often address ethical or environmental issues or follow social awareness of certain topics like a healthy lifestyle.
Elle’s kitchen challenges obesity for example, at the same time as inviting stakeholders to follow and share the idea. Visionary Challengers engage their stakeholders to be part of creating a new culture. This type of Challenger is not aiming to become a new market leader, targeting the state of the market, but recognising the need to change the mindset and be a Challenger.
There are many steps and ways to success in creating a successful Challenger brand. It is not always disturbing the norm, category transformation, controversy, uniqueness or thinking outside the box which works in your specific industry.
At DVC, we will assist with every aspect of a journey towards becoming a Challenger brand. From disrupting or challenging the status quo to educating customers and driving a Challenger mindset within the core of a businesses’ transformation.
DVC Consultants is a market leader in transformative consulting. It creates and consults to disruptor, disrupted and challenger brands.
It is clear that brands and their owning companies have no room for complacency, and need constantly to evolve, or risk becoming extinct.
DVC Consultants has therefore developed LOAF (Leadership and Organisation in Anarchic Flux) as a proprietary consulting process for supporting our clients in being disruptors and challengers, rather than being on the receiving end of companies more innovative.
Challenger and Disruptor brands succeed because they emerge from developments not properly observed by market incumbents.
LOAF works because it builds on DVC’s expertise and experience in an eclectic and wide range of sectors and disciplines, including branding, economics, politics, government affairs consultancy and new technologies.