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Fighter Brand

Fighter brands are one of the oldest strategies in branding. In a classic response to low priced rivals an organization launches a cheaper brand to attack the threat head on and protect their premium priced offerings. Unlike flanker brands or traditional brands that are designed with a set of target consumers in mind, fighter brands are specifically created to combat a competitor that is threatening to steal market share away from a company’s main brand. Fighter brands are usually a classic recession strategy. As value competitors gain share and private labels grow stronger - an increasing number of marketers turn to a fighter brand to rescue disappearing sales while maintaining their premium brand`s equity.

When a fighter brand strategy works it not only defeats a low priced competitor but also opens up a new market. Intel Celeron is a notable case study of successful fighter brand application. Despite the success of its Pentium chips, Intel faced a major threat during the late Nineties from competitors like AMD’s K6 chips that were cheaper and better placed to serve the emerging low-cost PC market. Intel wanted to protect the brand equity and price premium of its Pentium chips but also wanted to avoid AMD gaining a foothold into the lower end of the market. So it created Celeron as a cheaper, less powerful version of its Pentium chips to serve this market and keep AMD out. Intel’s subsequent 80% share of the global PC market is testament to the potential of a successful fighter brand to help restrict competitors and open up additional segments of the market.

Unfortunately, for every success like Intel Celeron there are many more cases of abject failure. Saturn from GM was meant to attack Japanese imports but ended up losing billions and helping destroy GM. Song from Delta was designed to hit back at low priced carriers like Southwest and JetBlue but lasted three years and cost the airline hundreds of millions of dollars. Funtime film from Kodak was meant to win back share from Fuji but did little to stem the tide. The history of fighter brands is a discouraging roll-call of failed campaigns that inflicted very little damage on targeted competitors and resulted, instead, in significant collateral losses for the company that launched them. My research into fighter brands published in the October edition of Harvard Business Review examines the classic strategic hazards that marketers must negotiate in order to ensure their fighter brand will emerge victorious from its low price battles.

The first tip is to consider whether an additional brand is really what your organization needs? An additional brand means less investment and management attention for your existing portfolio of brands at the very time when you probably should avoid any distractions. Do you really want to spend precious resources on a new low priced fighter brand at a time when perhaps the focus should be on adjusting your existing brands and strategic thinking? Too often companies embark on significant cost cutting and re-pricing strategies for their premium brands after acknowledging that their respective fighter brand strategies had failed. In each instance, however, these crucial strategic transformations are usually delayed by years while the organizations conceived, executed and then retracted their fighter brands. Start your fighter brand campaign by questioning whether you even need one in the first place. Less brands is always more.

If you decide to launch, the next key consideration should be cannibalization. Most fighter brands are created explicitly to win back customers that have switched to a low-priced rival. Unfortunately, once deployed, many have an annoying tendency to also acquire customers from a company’s own premium offering. Too often the break even analysis used to justify the launch of a fighter brand unrealistically favors competitor steal over premium brand cannibalization. The best fighter brand strategies, like P&G’s use of Luvs in the diaper category, not only factor in the degree to which the brand will steal from its sister brand, they also include strategies to minimize the amount of cannibalization incurred. P&G specifically removed innovative features from Luvs and invested heavily in their premium brand Pampers to successfully ensure that the two brands attacked their respective competitors more than they fought with each other.

Another key focus should be consumers. The provenance of a fighter brand is very different from the usual brand launch. It originates with a competitor and the strategic success it has achieved, or threatens to achieve, against your organization. The DNA of a fighter brand is therefore potentially flawed from the very outset because it is derived from company deficiencies and competitor strengths, rather than a specific focus on a particular target segment of consumers. One of the reasons that Qantas succeeded, where so many other airlines failed, when it......

Source:
http://www.brandingstrategyinsider.com/2009/10/fighter-brand-strategy-considerat

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