The Challenger Brand Opportunity. Taking Advantage of the Advertiser's Dilemma

Most of our clients are small to mid-cap companies with modest marketing budgets. For these new brands, finding market space can feel like a wayward sailor setting foot on a hostile shore. Incumbent brands have developed mass awareness, established market positions, and built organizations with massive disposable resources. How can one possibly establish our brand in such a crowded market?

Although the beachhead may be steep, new market entrants should recognize the advantages they possess over their larger rivals.  Their ‘newness’ affords them several opportunities to displace, or even replace, their competition.  Bigger does not always mean better.  In the free market, Davids topple Goliaths every day. 

Revisiting The Advertiser’s Dilemma – Why Bigger Isn’t Always Better

As we discussed in a previous post, The Advertiser’s Dilemma and the Curse of Lagging Cultural Relevance, the affliction that plagues most major marketing organizations and fortune 1000 brands is fear.  A provocative, forward thinking communication strategy risks their established market position.  If you are a brand marketer at Proctor & Gamble, Mondelez, Frito-Lay, 3M, or any number of major brands, a novel marketing bet that backfires could cost you your job. 

As their incentives bend toward maintaining market position, these brands tend to rely on established practices that have proven efficacy.  This applies to both the mediums they run their creative on as well as their messaging strategy themselves.  Their massive budgets, established teams, and entrenched positions afford them mass market scale, but also expose weaknesses that challenger brands can exploit. 

The weaknesses? These brands are generally plagued with bureaucracy, move slow, and produce bland communications.  Advertising giants can shake markets with each step, but more often than not, they simply content themselves to stand in place. 

The Challenger Brand Opportunity

The very aspect of new affords a brand three distinct advantages over their mass market competitors. Specific niche markets are underserved. The nature of mass market causes a lack of differentiation. And no predetermined rules mean marketing options abound. Here are three case studies of Davids slaying Goliaths.

Go Niche. I Mean Super Niche. 

Mass market appeal means broad, muted, flat appeal.  High awareness does not necessarily translate to preference. A brand, well-designed for a specific consumer group, will always outperform mass market brands against that same group. Consider your own preferences. Do you want the generic brand or the brand made especially for you? 

Vans is now a 30-billion-dollar, global brand. It started as a shoe for skaters in Anaheim, California.  The signature mark was a stencil that founder Paul Van Doren liked to use on his skateboard.  They had one store and sold only 3 types of shoes. As they grew, they helped fund skate parks, sponsored skateboarding tournaments, and music events that catered to skate boarders. In 2016, 50 years after they were founded, they announced that they no longer exclusively considered themselves a skateboarding brand.

The mistake novice brands make is to be too much too fast. You don’t have the budget, resources, or scale to go mass market. Brands built on loyal, niche communities tend to last a lot longer. This niche also protects you from larger brand encroachment. Even though they can reach your audience, they aren’t FOR your audience. You are.

Create a Unique Value Proposition For Your Niche Market

In order to go niche, niche consumers need to know why you exist. A Unique Value Proposition is a concise, simple statement of the value you bring a consumer. Ask yourself, “What specific thing does that niche audience want or desire?” “What specific thing is frustrating about the current options?” “How is my product better, cheaper, or easier to use?” This will vary highly depending on the service or product you are selling. The key here is to keep the audience in mind and speak to them directly and simply.

Dollar Shave Club debuted with their service with this copywriting diamond: “For a dollar a month, we send high quality razors right to your door.” The incumbent, Gillette, was a gem of CPG giant Proctor & Gamble and sponsored Foxborough stadium for the Pats. Mass market razor blades were insanely expensive and locked behind brightly lit CVS plexiglass. Their USP was simple, clear, and effective. Four years later, Unilever bought Dollar Shave Club for $1 Billion dollars.

The mistake new brands make is putting too many reasons why in front of a consumer. Consumer mindshare is scarce. One study estimates that the average consumer is bombarded with 4,000 to 10,000 ads a day. Your USP must be simple, clear, and speak directly to the value you are providing to the consumer. Supporting value propositions can close a sale down the funnel, but a single unique value position should always lead.

With No Rule Book, Go Bold with Communications

Mass market means broad, bland appeal. Use the Advertiser’s Dilemma to your benefit. The same reticence mass market brands face is your opportunity to differentiate your product. Once you have a niche ownable market and a USP that speaks to it, go ham with it. Be as outrageous, funny, and irreverent as desired. Compared to larger brands, the creative breadth a new brand can bring to the table is remarkable.

The Squatty Potty ad

Shark Tank’s Lori Greiner, who made a $350,000 investment in the Squatty Potty, reportedly hated the brand’s debut ad with a pooping unicorn. So did a lot of other early naysayers. However, the campaign had all the recipes of success - A USP, “The best poop of your life, guaranteed”, a niche market of people looking to poop better, and now a hilarious Unicorn mascot.

New brands come to market with no defined rule book. While some view uncertainty as a curse, we see opportunity. New platforms ripe with plentiful users come online every day. Market analysis can develop bold new USPs. Novel media strategies lie around every corner. Creative direction options abound. The Advertising Dilemma paralyzes most mass market brands from action. As a new brand, there’s more space to play than you realize.

The market poses difficult questions for every new entrant. Incumbents will leer menacing over the horizon. Fear not, your niche audience, unique selling proposition, and freedom from the norms are your weapons. We get challenger brands because we are one. Now go forth and slay Goliath.