MARKETING STRATEGIES

Of the Challengers
If you can’t win,
change the rules of the
game —
A strategy for second-tier brands
 WHERE THE OPPORTUNITY
EXISTS

Research shows that smaller brands owned by bigger companies deliver

significantly less growth than independent smaller brands.

The Challenger The Leader

Ability to develop radical new Big corporations aversion to risk
Compelling
offerings Factors
Inability to challenge the very
Cultivate a different view of their principles that drive the success
market. of the company’s major brands.
 HOW A CHALLENGER DIFFERS

- Open to the idea of a new segmentation of the market

- Consider new basis like consumer needs or trends happening outside the
category that are disregarded by leaders.
- Develop an offering to address an untapped need in the marketplace.

Identify
Identify
consumer
consumer need
need
state
state that
that
wasn’t
wasn’t being
being
addressed Work
Work on
addressed inin on
product
the same product
the same &
&
category
category pricing
pricing Develop
Develop the
the
right
right
communication
communication
&
& channel
channel
Work
Work out
out aa Develop
strategy
strategy
plan Develop aa
plan for
for unique
consistent unique
consistent brand
execution brand
execution ofof culture
this culture
this vision
vision
It tends to
be easier
for smaller companies
to challenge established
market perceptions.
 EXAMPLE: STONYFIELD FARM

Developed specific
initiatives around
“strong women” and
Observed that most osteoporosis
organic yogurt buyers are
likely to be women, many
of whom may suffer from CAN WE DEPLOY
or fear osteoporosis. AFFINITY
Segmented the market MARKETING?
assuming consumers
would want to eat ARE
organic yogurt just like DOCTORS/MOTHERS
THE ONLY DECISION
they demand other MAKERS?
types of organic food

Identified general
consumer trend that had CAN WE SEGMENT
THE MARKET
not been leveraged in ANOTHER WAY?
yogurt—the need for
organic food.

IS
IS THERE
THERE AN
AN
UNREALIZED
UNREALIZED NEED
NEED ?? FOR SOAPS!!!
 SOME CASES
Segmentation based on the fact that
CARL consumers
consumers are
are looking
looking for
for tasty,
tasty, low-fat
low-fat CAN’T A HEALTH SOAP
BUDDIG lunch meat in a wide variety of flavors. CATER TO BEAUTY
NEEDS TOO ?
Challenged the general
perception that healthy food
can’t also be tasty food

Based on observations: People like

celebrities, like to participate in
NEWMAN’S OWN philanthropic projects and like a quirky, fun
food brand with products using natural CAN AN ASSOCIATION
SALAD DRESSING ingredients. BE DEVELOPED IN THE
He donated 100% of his profits after tax to
PERIPHERAL SPACE OF
educational and charitable purposes SOAP CATEGORY? LIKE
MOTHER CARE, WOMEN
Built a powerful challenger EMANCIPATION ETC.
brand by developing a new
positioning in salad
dressings, rather than a new
product.
 E.G.: PABST BEAR

The cheap beer traditionally catered to a male,

middle-aged, blue-collar East Coast audience From an old brand which is
well-established in an
unexciting segment and is
slowly losing market share
CAN WE TARGET A
NICHE (upcoming in
Skateboarders were looking for a brand that future) INITIALLY TO
was out of fashion with the mainstream. To
cater to them the brand avoided mainstream CREATE A STRONGER
advertising and promotions campaigns, BRAND IMAGE FOR
sponsoring relevant bicycle races, and giving
away T-shirts at targeted events. THE LONG RUN ?
Been revived in another
segment with a very
different positioning

Pabst leveraged the trend to get into trendy

bars that are popular with this young, hip crowd
 E.G.: BABOOL TOOTHPASTE

Sometimes the OBVIOUS SELLS!!

CAN WE DEPLOY
INGRIEDIENT
Babool’s proposition ‘Isme long ka tel hai’ saw an MARKETING
increase in both value & volume shares of the NEVER DONE
company in 2005. BEFORE IN
MEDICATCATED
The irony of it all is that all toothpastes have ‘long’ SOAPS ?

BABOOL’S VOLUME
BABOOL GREW ITS
SHARE GREW FROM
VALUE SHARE BY 2.4
5.1% IN 2005-06 TO
% POINTS TO 5.4%.
8.4% IN 2007-08
 MALT-O-MEAL

Makes cold cereals that are

bagged rather than boxed and
command a lower retail price
than boxed cereals
CAN WE HAVE
CHEAP– ATTRACTIVE – NEED
Challenged the cold cereal category by BASED SOAPS. CAN A NATURE
being a successful low-price player (Ayur) +BEAUTY +HEALTH
PROPOSITION WORK ?

DOES HEALTH SOAP= SIMPLE

Redesigned PepsiCo’s Quaker brand have seen their bagged SQUARE, NON-FASHIONABLE
packaging cereals business sagging—they sold that PACKAGING?
business to Malt-O-Meal in 2002
Gave better Quality CAN’T A SOAP BE SOLD ON A
at same price as WICKED-MAVERICK BRAND
boxes ATTITUDE, WHY LIMIT IT TO
Malt-O-Meal has been successfully building its bagged cereal SKIN & HAIR CARE?
franchise, with products such as Tootie Fruities, Mateys etc.
Gave retailers higher
profit margin

Their insight was that there is a need for cheaper cereals that are bagged
rather than boxed, but still are marketed in a fun fashion, with attractive
product names & colorful bags.
NO RISK NO PROFIT

FOR GROWTH
RISK IS
INEVITABLE
If we don’t challenge
our category leadership,
somebody else will &
the loss will be more
than of not exploiting
fully the potential.
 A WRONG ROUTE

CHEAPER! FASTER! BETTER!

This is the weakest possible position to approach.
Need to go beyond PRICE/QUALITY &
Same value, cheaper price EFFECTIVENESS as propositions
Same price, quicker delivery Product Experience & Indulgence, Brand Image &
health, Consumer personality positioning, Self
Same price, better quality Image innovator, Consumers aspirational ID are the
new ways to go

Results in lower margins as you cannot chase economies of scale, better

trading discounts, lower cost of capital, and preferential supplier contracts
etc. like a market leader
 ADVERTISING EXPENSE ARE
INVESTMENTS IN BUILDING ASSETS

In
In Nando's
Nando's Chicken
Chicken ads
ads every
every ounce
ounce spent
spent yields
yields yet
yet another
another
five
five ounces worth of exposure because viewers enjoy the
ounces worth of exposure because viewers enjoy the ads
ads so
so
much that they actively re-tell them to friends. 
much that they actively re-tell them to friends. 
Castrol
Castrol and
and Vodacom
Vodacom ads
ads evoke
evoke the
the same
same positive
positive emotional
emotional
response and recall.
response and recall.
On
On the
the other
other hand
hand for
for every
every ounce
ounce spent
spent by
by Kentucky
Kentucky Fried
Fried
Chicken,
Chicken, half
half is
is probably
probably wasted
wasted as
as KFC
KFC ads
ads are
are not
not retold
retold nor
nor
have
have they
they managed
managed toto establish
establish an
an emotional
emotional bonds
bonds with
with KFC
KFC
ads.
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 ANTIBACTERIAL ACTION

• Anything that destroys bacteria or suppresses their growth or their

ability to reproduce.

• Antibacterial products do not reduce the risk for symptoms of viral

infectious diseases in otherwise healthy persons.

• Antibacterial products do have the potential to reduce symptoms of

bacterial diseases in the home
 SACRIFICE IS THE WAY TO GO!

- Give up the right to play in all markets with the aim to become
market dominant.
IDENTIFY
IDENTIFY 1
1 PROPOSITION
PROPOSITION
- Focus on one market and then over-commit to that specific THAT
THAT CONSUMERS CAN
CONSUMERS CAN
IDENTIFY
IDENTIFY WITH & THAT HAS
WITH & THAT
market. CHANCES
HAS
CHANCES TO
TO SELL.
SELL.
SOMETHING
SOMETHING FOR
FOR WHICH
WHICH
THERE
THERE IS
IS A
A NEED
NEED BUT
BUT HAS’NT
HAS’NT
- Become a category leader to dislodge the incumbent leader in BEEN PROPOSED BEFORE
BEEN PROPOSED BEFORE
the chosen market.
AVOID
AVOID PUTTING
PUTTING IT
IT IN
IN A
A
COMPETING
COMPETING POSITION WITH
POSITION WITH
DETTOL
DETTOL OR
OR LIFEBUOY.
LIFEBUOY. ITIT
- In an over capacitated market being number two or three is an SHOULD
SHOULD HAVE
HAVE ITS
ITS OWN
OWN NICHE
NICHE
extremely undesirable and unprofitable position to be in. HOWEVER SMALL
HOWEVER SMALL

- A challenger brand is not competing with the leader at all who

has already been chosen as the leader by the consumer