It is not the size of the dog in the fight that matters most but the size of the fight in the dog that matters. The days of being bullied by giants are over.

Today, the business landscape has changed so dramatically that brands have opportunities to challenge their competitors and attack the market from many different angles. The key to success is committing to a strategy and doggedly pursuing it. You have to be able to challenge established businesses in your industry hence the term Challenger brand. The moment one mentions the phrase “challenger brands”, classic marketing stories come to mind such as Avis versus Hertz, Coca-Cola versus Pepsi, and, back home, BAT versus Savanna Tobacco, ZUPCO versus Kombis and the list goes on.

These are stories of David versus Goliath, with the smaller company boldly nibbling away at the market share of the established giant, frequently achieving great success.

The idea of a challenger brand connotes an exciting duel where the small fighter or the under- dog fights a strong and established giant. In fact, it is a rivalry that seems to put the underdog at an advantage because everyone wants to see him succeed.

Challenger brands usually operate like insurgents. They use of surprise and are bold, fearless and unpredictable. They hit you when you least expect it. Econet Wireless used this strategy very successfully when they introduced mobile money in Zimbabwe and they caught established financial institutions flat footed.

In addition, creativity, innovation, acumen, speed, agility and decisiveness are very crucial if a challenger brand is to be successful.

To better understand the challenger brand at work, let us consider the traditional definitions of a market leader and challenger brand.

Market Leader.

Conventional wisdom says that the market leader is the brand that has the largest market share in a specific category. For example ZUPCO was the market leader in the urban transport business some years ago. The market leader also has a larger marketing and advertising budget than its competitors who do not necessarily have deep pockets but deep ideas and concepts. The market leader is able to lead in market reach and coverage, promotional depth and new product introductions. They can also afford to invest in new technologies, systems and processes that help to fortify their position against onslaughts by competitors.

A market leader also acts as a reference point for competitors who may decide to ignore, emulate or confront the leader.      

Market share is often identified as one of the most significant variables affecting a firm’s profitability. As a result, gaining market share and striving to be the top player is the business focus of many firms.

However over the years, critics have questioned the relentless pursuit for higher market share as the sole strategy for success. There are companies that are able to post very high returns in spite of their low market share.

Challenger Brand.

A challenger brand is one that is not number one in its category and that has its own set of challenges apart from leading brands. Challenger brands are either best at something important to a specific group of customers or they are actively striving to become the best at delivering something their customers want.

It is very important for a market challenger to define its strategic objective and identify market players to take market share from, whether by attacking the market leader, targeting a company that appears to be weak, has outdated products or sets unrealistic prices or finding smaller companies that fail to satisfy its customers. A challenger brand is also an aggressive competitor who wants to capture market share and is willing to take risks.

One of the success stories of a challenger brand in Zimbabwe, is CBZ which managed to transform itself through a very aggressive and bold marketing strategy from being a number seven out of seven commercial banks to number three within two years. The strategy of the bank was “to make our competitors smaller and smaller everyday” according to its former Executive Director for Marketing. This worked very well and the bank managed to grow its market share from 3% to 20% within two years from 1999 to 2001.

Strategies employed by Challenger Brands.

True challenger brands engender a corporate culture of willingness, openness and energy for embracing new modes of thinking. This includes a higher organisational tolerance for calculated risk taking. The only risk a challenger brand can take is not taking any risk.

One of the strategies that a challenger brand can implement is being a “Fast Follower” as opposed to a “First Mover”. First mover is generally associated with being the inventor, the product pioneer or market pioneer. The inventor is the firm that develops the patents or important technologies in a new product category. On the other hand, the Fast Follower, is an organization or brand that is able to see what others have done and then move quickly to do the same thing “differently”. This we believe is one of the strategies a challenger brand can apply in its pursuit to challenge established brands. A good example was how Econet managed to migrate the concept of mobile money from Kenya, adjust and adapt it to the Zimbabwean market and ended up taking the lion’s share in the market.

Some of the key success ingredients for a fast follower are product innovation, market timing, free-rider effects and leveraging of complementary resources. Innovation is very important in that the challenger has to have the ability to re-imagine the whole concept rather than just copy and pasting. One has to see how and where the concept can be improved.

The idea is not just to look at a concept but see. Eyes that look are common but eyes that see are rare. You should be able to have eyes that see as a challenger not those that just see. This calls for an analytical mind which is able to go beyond the superficial understanding of the concept one is analysing.

Most of our marketers in Zimbabwe lack this ability. They are not able to differentiate “substance” over “form”. They are not methodical in their analysis and hence they end up introducing “me too” products on the market.   There is a difference between copying and looking at something and then re-imagine it. That on its own is an art. It calls for an inquisitive mind. One has to be methodical and dogged in their analysis. While speed is crucial there is need to avoid rushing before one is confident that they have done everything to create an innovative product or service. Otherwise this gives room to competition to improve on your weaknesses.

The next strategy has to do with timing of market entry. Usually the best time to introduce the concept is during growth stage. It doesn’t make much sense to introduce the concept during the early stages or adoption stage because the target audience will still be adapting to the new concept and during that time, it could be too early to identify any weaknesses or shortcomings of the concept introduced by the market leader.

There are also “free-rider” effects such as lower costs in Research and Development (R&D), lower work force training costs, lower consumer education costs which the challenger brand is able to enjoy as long as they have perfect timing in their entry into the market.

A Fast Follower, never allows a competitor to settle in on a new concept without launching a response. The idea is for the Fast Follower (which is being used interchangeably with Challenger brand terminology) to respond hard and fast using better management and execution skills than the competitor with flawless execution and devastating efficiency. It is therefore crucial that the team has the culture which will facilitate the execution of this concept.

The idea of a market leader versus challenger brand may sound like a simple concept, but not all challenger brands fit neatly into the categories of some of these challenger brands such as Avis, Pepsi or the success story of the then Jewel Bank of Zimbabwe.

New opportunities created by the digital environment

The business environment continues to change dramatically. Globalization, technology, digital media and a new generation of consumes have opened up a new world of possibilities for strategic companies. Mass marketing has given way to fragmented markets and social media is an essential part of the marketing mix.

Furthermore, the Y Generation has dramatically different ideas about their life style. They are difficult to persuade with their demands for personalization, immediacy, convenience and connectivity. This creates space for an aggressive challenger brand to disrupt products and services in the market. The secret is in the ability to place your business strategy on a digital platform. With a well structured digital strategy, one is able to disrupt the market and create high returns as a challenger brand. Most of the established businesses are usually very casual in their approach and they are very docile and their response is not as quick as that of a young and agile challenger brand. 

The idea is also to create emotional connections for customers with brands. This is done as customers reach out for positive experiences and a sense of belonging to a group that suits their individual needs.

A world this complex and fragmented, definitely offers a multitude of opportunities for challenger brands. There couldn’t be a better era for a challenger brand to flourish than the current era we find ourselves in. It is very easy for a brand that is created at the back of a garage to come and topple businesses that have been established for decades.

The ambition of a challenger brand is to be able to do more with less and that determination is what drives creativity and innovation.

 Concluding Remarks

Challenger brands must devise a marketing strategy that challenges category conventions and does not simply mimic the moves of the leader or other successful category players. You create your own rules. Rules are only meant for those who can’t come up with their own.

Your marketing strategy should be rooted in a business strategy that is built around challenging tradition or conventional thinking.