Every industry has its champion — the leader that commands the largest share of the market, dictates the latest trends, and boasts the most well-known, well-respected brand.
For every other player, particularly those that are relatively new on the scene, the task that faces them can be a daunting one — even if their aspiration is simply to carve out a valuable niche in the shadow of a leading brand, doing so means going toe to toe with a champion. And for those looking to take on the industry leader and usurp the throne, an even greater challenge awaits.
But as the story of David and Goliath teaches us, it doesn’t matter how big your rival is, if you’re smarter and braver than them, then the market is yours for the taking.
This article is for the marketers and brand managers working with a challenger brand — those who face the seemingly impossible task of taking on an industry leader. We’ll cover the main strategies that can help grow your brand at their expense and highlight the most helpful tools available to you that can help tip the scales in your favor.
Heavy Is The Head That Wears The Crown
First, let’s identify what you’re up against. The market leader in your category will be the brand with the greatest share of the market — a quality that will probably mean they also have access to a large marketing and advertising budget, giving them the ability to reach a broader range of consumers with a wider variety of campaigns.
On top of this, their dominance will also likely afford them the breathing space to invest in improving their product or services, which could give them the edge over competitors and a level of adaptability that means any advantage you gain, may not last long.
As the dominant force in your category, these brands will also likely call the shots when it comes to the main trends that permeate your industry. The look and feel of their identity, their customer experience, and the style of advertising they favor will be regarded as the industry standard by the average consumer.
But being on top can have its downsides, and challenger brands need to know what these vulnerabilities are in order to get on top.
According to research by professors at the University of Alberta, brands that dominate an industry with little or no natural competitors are at a real risk should one enter the market with an alternative that rivals their own. At this point, “consumers will now feel they have a choice and may flood to the new product or service simply for that reason.”
As one of the paper’s authors put it:
“Even though we still get really good at shopping at that store or using that interface or website, we never formed that loyalty and we want to assert our freedom to choose… Eventually, when a new competitor enters the stage, we are inclined to try that and actually switch away from that incumbent.”
Finally, being the biggest brand in any given category and coming to represent that industry in the minds of consumers means it also has to shoulder the misgivings about the industry as a whole. This can make them vulnerable to direct attacks and comparisons from smaller competitors (more on this later) — especially when these challenger brands are able to solve customers' problems with new and innovative solutions.
Before we move on, it’s also worth saying that all of these vulnerabilities could be inherited by your brand, should it be successful in usurping the top spot in your industry. An unrelenting pursuit for greater market share shouldn’t be the main metric of your brand’s success — indeed, many brands find a more comfortable spot in 2nd or 3rd place where they can still thrive while catering to slightly more nuanced tastes.
A good example of this is Nintendo, which typically lags behind Xbox and Playstation in the ongoing console wars, but has “differentiated itself by focusing on less powerful gaming platforms that are fun, unique, family-friendly, and based on group play.”
Going On the Offensive
There’s no better way to get attention than to call out market leaders in your campaigns and directly compare your services to theirs.
Every brand has its weak spot — and if that weakness is your brand’s strength then shout about it. Going on the offensive this way is a great tactic because it allows your brand to piggyback on the strength of your competitors. By making them the focal point of your campaign, you can rely on their stronger brand awareness and higher levels of brand understanding to do the heavy lifting when introducing your brand proposition to audiences.
Rather than explaining what your brand is and what product or service you’re selling, a direct comparison allows you to efficiently communicate that you operate in the same industry, offer the same service, and outperform the more recognized industry leader.
A great example of this type of offensive brand campaign is Apple’s comparative ad series that personified their offering as a simple, more stylish, and more consumer-friendly alternative to Windows. Mac may still not be quite as ubiquitous as PCs but these campaigns were certainly effective in ending Window’s once unquestioned dominance of the computing market — while also handing them a whole host of negative brand associations that they’ve struggled to shake off ever since.
Mac vs PC
Just remember the famous saying that people in glass houses shouldn’t throw stones — an attack on a competitor might earn you a place in their next campaign. Another important consideration to make is that your campaign doesn’t break any copyright laws and that your comparisons can be backed up. Also, try to keep things civil — a vicious attack on a competitor isn’t a good look.
A Short Note on Brand Tracking
Framing your challenger brand in the right way requires a strong understanding of the market. Being able to see which groups are aware of your competitors and how strong their preferences are for them will allow you to see which audience types have the strongest bonds to the industry leader — and which ones might be dissatisfied or uncatered to.
Going one step deeper and tracking how consumers perceive the various brands within a certain category can help highlight where weaknesses lie — if a large number of consumers perceive the industry leader to be unsustainable or too expensive, for example, you can confidently make this a central theme to your challenger brand identity.
Brand monitoring software like Latana’s is perfect for this job, allowing you to delve into brand associations while also tracking your own brand awareness, understanding, consideration, and preference over time — seeing whether you’re activities are shifting the needle in the right direction.
10 Brand Identities That Can Be Leveraged By Challenger Brands
Whether your brand represents the next big thing or is content to remain a plucky underdog simply trying to carve out a niche within the market, leveraging your status as a challenger and turning this into a core part of your brand’s identity is a great strategy to shoulder your way into a competitive category.
Focusing on the aspect of your offering that makes you a challenger to the status quo can be a great way of building out your brand and helping consumers understand what sets you apart from your more mainstream rivals — which, in turn, can help drive their purchasing decisions and brand preferences.
But there are myriad different ways that brands can present themselves as challengers. In their book, “Overthrow II – 10 Strategies from the New Wave of Challengers,” Adam Morgan and Malcolm Devoy identify 10 different types of challenger brands that embody the variety of ways this status can be used to attract new customers and foster loyalty — at the expense of the industry’s current champion.
Let’s take a look at those 10 strategies.
Missionary: Essentially an activist brand, these brands put a “strong sense of purpose” at the core of their identity — good examples include Tony’s Chocolonely or Patagonia.
Real and Human: A smaller-scale operation fueled by passion and run by real people rather than corporate drones. Lush, which labels its products with the names of the employees who created them, is a strong example of this type of brand.
Next Generation: These brands call out the status quo and often provide a complete alternative to a whole category, asking whether traditional brands are appropriate, sustainable, or even relevant anymore. Brands like Impossible Foods and Micromobility provider Bird certainly fit this description.
People’s Champion: By portraying themselves as advocates of consumer rights, People’s Champions highlight their own fairer alternative to industry leaders that have taken advantage of their dominant position for too long; A lot of Neo-banks brand themselves this way.
Enlightened Zagger: These brands purposefully resist current trends or technological advancements in favor of stripped-back, simplified offerings. They’re the branding equivalent of choosing a record player over a music streaming service. A good example is the Slow Journalism Magazine.
Democratizer: In industries that were formerly closed off and inaccessible to most, Democratizers portray themselves as brands that are breaking down barriers and inviting more consumers to take part. Fenty, which offers a more inclusive range of cosmetics for people with a wider variety of skin tones, is a prime example.
Irreverent Maverick: Plucky underdogs through and through, Irreverent Mavericks use their smaller profile to be provocative and playful and challenge the corporate blandness of industry leaders. Think BrewDog or Dollar Shave Club.
Feisty Underdog: These are brands that define themselves mainly as the main binary alternative to a market leader. Examples include Pepsi, Bumble, and Under Armour.
Dramatic Disruptor: Similar to Next Generation challengers — these brands aren’t trying to undermine their entire category but represent a significant leap forward. At the core of these brands’ identities, is an offering that is superior to the current market leaders.
Local Hero: These brands have a deep sense of place at the core of their brand, and champion the needs of the community around which they are based — and which they serve. Usually, this is portrayed in direct opposition to the international character of market leaders.
These identity types offer brands numerous ways to build out a brand story and mission that can then effectively draw consumers away from the competition. But remember that even those brands that portray themselves as challengers can still end up dominating their category — Oatly, BrewDog, Tesla, and Apple are all great examples.
Once this happens, brands might need to reassess whether their challenger identity is still suitable.
Challenger brands may have the disadvantage of fewer resources, smaller budgets, and a shorter reach when it comes to marketing campaigns, but they can leverage their status in numerous ways to persuade discontented consumers to try something new.
That many of yesterday’s most famous challenger brands are now industry leaders in their own right demonstrates that it’s certainly a viable route to upending the status quo of an industry and rising to the top. But, ultimately, success relies on a strong understanding of the marketplace and knowing exactly how to frame your brand to encourage consumers to give it a try.
If brand managers and marketers have an in-depth knowledge of the consumer landscape and understand how their target audience perceives the competition, they can exploit that dissatisfaction for their own gain and build their own stronger, better brand.