Taking on the challenger brands

Taking on the challenger brands

Recently Budweiser has been copping flak for its continuing aggressive stance against craft beers. Social media reaction at least seems to be that this is an unfair fight and that the big corporate should not be competing in this way. I’m a long-time advocate of challenger brand strategy. I’m of the view that if you can goad the incumbent into a fight and portray your brand as the much smaller player with principles, then it’s game-on. But what if you’re on the other side of the counter? If you’re a major brand and you’re being hounded by an upstart smaller player, how can you respond without drawing flak or encouraging buyers to support the underdog-that-dared?

Work your brand strengths

Start by recognising the strengths that you have to play with: an established place in the market; the reach that comes with your networks; the reserves to play the long game; and the resources to at least match, and at best overpower, anything that others may throw at you. Chances are you also have history (and therefore track record) on your side and hopefully that history proves your commitment, experience and expertise. Those are a lot of attributes to work with. The key is to use them carefully.

4 ways to respond with dignity

If you don’t want to take a direct approach in response to what you are being challenged on because you are concerned, probably quite rightly, that it will play straight into the hands of those throwing stones, here are four oblique but highly effective ways to minimise the effectiveness of the insurgent.

Counter-offer rather than counter-attack – In the short term, go to market with a great offer that simply makes choosing you so much more attractive. In the longer term, take the opportunity to discreetly re-shape your positioning so that you are less vulnerable to the position that the challenger is taking. Be careful in both cases not to make what you are doing appear as a response to what the challenger is claiming or a competitive strike.

Congratulate your customers – Mount a charm offensive. Be humble and grateful. Acknowledge. Remind the market just how popular you are as the leader and what that means in terms of what you deliver every day. Position this as a key benefit for your customers that the challenger brand will simply be unable to match. This approach is an excellent way to first recognise and then galvanise those who continue to be loyal to you. It’s also a quiet but effective way of using the pressures of scale and footprint to remind your distributors of why they should continue to prioritise you and not chase the sector’s latest bright shiny object.

Show another side to your character – Do something unexpected, something that reveals a different side to your personality. If you’ve always been a serious brand, do something that introduces a notion of levity. If you’ve always been light-hearted, maybe flash your serious side. Too many incumbents become vulnerable because they are unwilling or unable to demonstrate any personality, and yet humanity is exactly what people are looking for.

Initiate – Do something in the market for which your opponents have no answer. But, again, don’t do it to spite them, do it to win back the affiliation and loyalty of the wider community. If you are being challenged on your lack of innovation or your perceived complacency, put an initiative in play that significantly resets expectations in the sector. If you are seen as unfeeling or as trading on your dominant market position, sponsor a change or a partnership that addresses concerns or issues in the sector. If you are being challenged on pricing structures, introduce a new way of pricing what you do that doesn’t compete directly with the challenger but offers an honest and compelling alternative to the new rules they are trying to set.

You don’t have to attack in order to defend

The tendency of all leaders is to take competition personally and to attack it directly. There are times when that strategy is right. But there are other times, particularly when those challenging you are so much smaller, that reacting this way will simply make you look like Goliath. Remember, a successful challenger is actually doing you a favour. They are reminding you that the market is looking for options, new ways of thinking, different game-plans than the one you’ve had in place for so long. Take note and take action. But choose your actions very carefully. Answer – don’t just respond.

Acknowledgements
Photo of “Giant Statue of Ghengis Khan”, taken by Ludovic Hirlimann, sourced from Flickr

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2 Comments

  1. Blair says

    Excellent blog Mark. In a changing world and market, I love your pragmatic and calm approach to being challenged.

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