Branding Strategy Insider

Fighter Brand Strategy: Cure For Low-priced Threats?

When Jill Little, merchandise and marketing director at John Lewis, recently announced that the retailer was to introduce a value range, it was widely seen as a smart move.

The homeware products line has been specifically designed to help John Lewis defend its 'Never knowingly undersold' slogan against supermarkets that have moved into its territory.

At the launch, Little said the value range would be 'benchmarked' continually against Tesco's own-brand products to ensure it remained competitive.

Targeting the competition

John Lewis may or may not be aware of it, but it has just rolled out a fighter brand - a lower-priced offering introduced by a company to take on specific competitors. It is one of the oldest strategies in branding, and one that is making a reappearance during these tough economic times.

Brands like John Lewis, which typically occupy middle price points, are experiencing tough conditions as the recession forces their customers to trade down to lower-priced offers from the likes of Tesco.

Managers such as Little are then faced with a classic strategic conundrum: should they tackle the threat head-on and reduce existing prices in-store, knowing it will reduce profits and perhaps cheapen the brand? Or should they maintain prices, hope for better times to return, and, in the meantime, lose customers who may never come back? Offered two equally unpalatable alternatives, John Lewis has, like many companies, decided on a third option, and launched a fighter brand.

Seven Critical Factors Of Brand Strategy Success

 
The following seven factors continue to rule the day for building leading brands: 

Organization Support

•CEO leadership & support

•Distinctive corporate culture that supports brand promise

•Ability to obtain support from a broad spectrum of employees

•Alignment of brand messages across functions

Brand Presentation

•Strength of brand identity system

•Effective use of visuals/imagery

•Ability to capture the brand in a slogan

Source: The Conference Board’s 1998 “Managing the Corporate Brand” study

Sponsored by: The Blake Project

When To Launch A Second Brand

Whenever a fashion or technological change occurs, an existing brand, no matter how dominant, faces a choice.

Should the brand be ‘stretched’ to encompass the new fashion or technology or should the company launch a second brand? If the change is significant enough, the better answer is almost always ‘launch a second brand.’

* The rise of casual clothing in the workplace led Levi Strauss to introduce Dockers which has become a billion dollar worldwide brand.

* The success of Mercedes-Benz and BMW led Toyota to introduce Lexus which has become the largest-selling luxury vehicle in the U.S.

* The success of Makita, a Japanese professional-tool brand, led Black & Decker to introduce DeWalt which has become the dominant brand in the category.

* The success of Costco led Wal-Mart to introduce Sam’s Club which is now neck and neck with the category leader.

When it comes to launching successful second brands, you rapidly run out of case histories. By far the majority of marketers prefer to expand their core brand to cover the new category. With mediocre success. Some examples:

How To Attack The Leading Brand

You know the kid’s game. Rock (fist) breaks scissors. Scissors (two fingers) cuts paper. Paper (flat hand) covers rock.

So what’s the best strategy in a game of rock/scissors/paper? The answer is obvious. It all depends on what strategy the other kid uses.

So, too, in marketing. Your best strategy often depends on what strategy your competition is using. This is especially true if you are trying to compete with a No. 1 brand, perhaps the most difficult job in marketing.

Take Pepsi-Cola. How does the brand compete with No. 1 Coca-Cola?

Be the opposite. Coca-Cola is widely perceived to the real thing, the authentic brand, the long-time market leader. So how does Pepsi-Cola become the opposite of the real thing?

‘The imitation cola’ is not going to cut it. Pepsi had to look a little deeper into the situation. Coca-Cola is also perceived to be a brand that has been around for a long time. (Actually 123 years). It’s the cola your parents drank.

So Pepsi-Cola became the cola for the younger crowd. ‘The Pepsi Generation.’

Over the years, The Pepsi Generation is the only advertising strategy that has substantially moved the needle. And aside from a technological breakthrough, the only strategy that is ever likely to move the needle.

Be the opposite is a marketing strategy that can work for any brand in any product category. How did Loew’s, for example, manage to make substantial progress against market leader Home Depot?