Secrets of Challenger Brands

Haxthausen, Ove
May 2004
Marketing Management;May/Jun2004, Vol. 13 Issue 3, p35
This article discusses the need for smaller brands to challenge the rules of the game in their category and develop radical new offerings based on a different view of their market. While big, leading brands are critical for large food and beverage manufacturers, second-tier brands remain important revenue generators for big companies. Smaller companies give brands all their attention, while for big companies the second-tier brands often have second priority. Successful second-tier brands are often challenger brands and it tends to be easier for smaller companies to challenge established market perceptions. Building a challenger brand begins with a different view of a category. This new segmentation will often be based on trends that are happening outside of the category or on consumer needs that have been disregarded by major brands. It will lead the challenger brand to develop an offering that is new, typically in terms of the product, the positioning, the price, or any combination of those elements to address an untapped need in the marketplace. The process is not always deliberate, however, and many brands may have stumbled on a great idea without a formal segmentation analysis. Yet this challenger's view of the category is the element that most successful second-tier brands have in common. They identified a consumer need state that was not being addressed in their category, and that challenger's vision of the market then drove a consistent execution.


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