Pepsi v Coke. Virgin Atlantic v British Airways. Avis v Hertz. Think of the term challenger brand and these are just some of the 'challenges' that come to mind. Historically, challenger brands are the underdogs, taking on their category leaders in the strive for market dominance. Some have even specifically traded on this second-best identity; Avis' 'We Try Harder' campaign was built around its status as the second-largest car rental company after Hertz.
However, these traditional underdogs do not typify the challenger brand in 2012. Although the days of David and Goliath marketing are not dead, the concept of the challenger brand is not only synonymous with 'maverick', but now incorporates a number of identities, and challengers are taking different stances in the quest for standout.
The brand's size doesn't necessarily matter; it's all about attitude. Take innocent, for example. Virtually unknown back in 2005, it is now the UK leader in the smoothies category (with 75 per cent of the smoothie market), yet retains its challenger values in terms of positioning, with its quirky and playful image.
Adam Morgan, founder of eatbigfish and author of Eating the Big Fish, says innocent placed itself as a challenger when it made smart use of the media at its disposal.
“Challengers have always had very limited communication budgets and have always had to rely on very different ways to engage with consumers. The vital difference is how they reframe the way they think about what media they have at their disposal. Look at innocent’s (now much replicated) strategy to use packaging, delivery vans, and in-store display as 'House Media’.”
Advertising in the traditional sense plays a less important role in the building of today's challenger brands. Instead of investing in traditional media, many brands are placing increased importance on integrated community strategies and 'packvertising', where previously TV or print advertising might have reigned supreme.
Premium crisp brand Tyrrells is one such example of a brand which does not advertise in the traditional sense. The Drum caught up with marketing director Oliver Rudgard to discuss the role packaging plays for the brand, and how a challenger can build its brand without conventional media.
“Tyrrells is a brand that people talk about, not a brand that talks about itself,” says Rudgard. He goes on to explain why the brand opts for its community-centred approach, observing: “It's no longer the media owners who drive the way that communication works, it's actually the consumer who decides and chooses.”
Living in the age of consumer choice, then, is impacting on the way challenger brands engage with their audience. Rudgard highlights that this change of role for the consumer has made it difficult, in “conventional advertising terms, to reach people and therefore there's the risk of it [traditional advertising] being less effective.”
This is why the brand places so much of its efforts and investments into its packaging; because it's not just a “means of carrying the product”, as Rudgard puts it, but a starting point in Tyrrells' “conversation with its customers”.
Brand design is key to any identity as a challenger, as it “needs to show that the challenger brand represents the living embodiment of change,” explains Yael Alaton, strategy director at Pearlfisher. “The design needs to provoke, seduce and transform. Simplicity is key.”
Yael Alaton: “Help Remedies is a good example of a brand that uses simplicity to help people by cutting through the clutter.”
Social media is also crucial for today's challenger brands – it is the means of seeding and continuing a brand's conversation with its customers. It has played a key part in craft beer company BrewDog's brand development, as co-founder James Watt explains: “We have always felt that social media plays a vital role in the strength of our brand and we make sure we are always talking to people who like us (or might not like us...).”
This is a key point: the importance of continuing conversation whether or not you are liked as a brand. “True accessibility, and not just the illusion of accessibility,” argues Watt, “is vital in this day and age.”
Disregard for market restrictions and norms is another trait associated with challenger brands, and one which embodies BrewDog's approach as a challenger to mass-produced lager. “We say, if we can think it, it can be done,” says Watt. “If that means creating beer stuffed taxidermied squirrels or a beer without hops, or a beer brewed under the North Sea, we’ll do it. Our passion, first and foremost is for great tasting beer.”
That motion of stepping outside the category norms, and belief in the value of a brand's own convictions, is echoed in Tyrrells' marketing strategy. Rudgard explains the brand's motivations behind its quirky packaging, which veers away from conventional crisp packet design: “We subvert the category rules. The category says you should do one thing, and we say actually no, spin that on its head – think about it from a completely different angle.” The result, Rudgard argues, is “a more intelligent way of communicating.”
Becoming mainstream presents its own challenges for challenger brands and their image. Once a brand has achieved commercial success, perhaps by becoming the leader in its category, previous marketing strategies may be deemed unsustainable. So how can brands stay disruptive after they've become mainstream?
Morgan argues there is a “persistent view that challenger brands can only adopt one of two strategies – either the position of David against the industry Goliath, or to rip up the rule-book entirely.”
This perception, Morgan explains, reinforces the idea that challenger characteristics are not sustainable after mainstream success – a dangerous mentality which limits the possibilities for brands. He goes on to suggest there are a number of different challenger narratives that brands can adopt – People's Champion, Game Changer or Missionary, for example. “A challenger brand may have launched into the market as one of these types,” explains Morgan, “but with success, while their identity and values must remain constant, they may need to evolve across narratives in order to stay stimulating and relevant to the consumer.”
Red Bull is a good example of a brand which has not only retained its original values but actually augmented them with its forward-thinking content production strategy; its recent Stratos jump was more than a leap of faith for both Felix Baumgartner and the brand, but cemented the brand as an original thinker, unafraid to take risks.
Taking risks is inherent in the identity of a challenger – they must exhibit real desire for behavioural change, not just a 'me-too' mentality. This is touched on by Yael Alaton, who explains: “Challenger brands bring about change and progress. They create the new and define the way forward. Challenger brands are about provocation, seduction and transforming a category.”
Arguably this attitude of seeding a change of behaviour in consumers is the defining characteristic for today's challenger brands. Alaton comments that this is represented by an “immediate presence and energy” which demonstrates that their proposition provides consumers with a new way of doing things.
Once they have gained acceptance from consumers, Alaton says, challenger brands have the potential to become iconic.
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