Brand Leadership Is a Niche Activity
06 March 2011
We are competitive animals by nature. Our DNA programmes us to strive for victory, to be top dog. Size counts, and big is beautiful, we are constantly told. Nowhere is this more evident than in the furiously fought world of marketing, where all a brand manager ever wants to be is number one. The market leader. To most marketers, survival of the fittest means the same thing as creation of the fattest. Why would anyone want their brand to be anything other than the biggest, anyway?
That was probably a rhetorical question until Avis came along, and slickly made a commercial virtue out of being Number Two. Across the entire marketing landscape, a collective sigh of relief could be heard as managers immediately realised that Avis had shown them the Holy Grail of mid-table brand strategy, by demonstrating that there was life below the top line of Nielsen reports. The trouble was, of course, that it was always assumed that the Avis approach was a short term one, and that the 'we try harder' Number 2 stance was only being exploited as a way to get to be Number One. It was a means to an end rather than an end in itself.
And this was a view that was espoused by other respected analysts, including the world famous Gurus of the fundamentals of marketing, Trout & Ries, whose most memorable and oft-quoted 'law' suggested that if you can't be number one in your present product category, then find another category in which you can. The resultant pressure was relentless, with ultimately only one marketing objective that truly mattered - brand leadership - and only one measure that counted - market share.
But in many ways this is a very na've and even perverse response to natural market dynamics. After all, even the most elementary arithmetic will quickly uncover the fact that market leaders are by definition in the minority (except in those uncommon categories with only two players or less). For every brand that tops the market share league, there are several more (perhaps dozens more) which occupy lesser positions, and which are mostly 'doomed' never to know the ecstasies of being able to look down on all the rest. But should they give up trying? Is every brand, no matter how modest in size, a potential Number One, waiting only for the right support and opportunity? The old school of marketing would probably argue that this is the case, and that even if there was only a slim chance of becoming the category leader, every brand should still behave like the leader-in-waiting and adopt appropriately ambitious strategies accordingly. If you don't set your sights high, you'll never hit that distant target, they said.
Now a different voice is being increasingly heard - a voice that recognises the realities of market share arithmetic and puts forward cogent arguments for the merits of being number two or below, not just as a stopover on the route to the top, but if necessary as a permanent and profitable state of affairs. One of the leading proponents of this view is Adam Morgan, whose seminal work 'Eating the Big Fish' looks closely at what he defines as 'challenger brands' (i.e. any successful brand that isn't - yet - market leader). The central thrust of his thesis is that challenger brands need to behave entirely differently from brand leaders in order to progress; brand leaders have too many inherent advantages over lesser brands to be toppled from their perch by cloned strategies.
Phenomena such as 'double jeopardy' have been shown to encourage the exponential growth of leading brands because not only do these brands gain the highest share of category customers (by definition) but they also attract more of the customers who buy the brand with a disproportionately high frequency. All other things being equal, the big get bigger just by being big; and the corollary to this apparently unfair state of affairs is that the smaller brands make little headway by pretending to be like their bigger rivals. Different strategic imperatives must be adopted, and Morgan mapped out eight of these challenger brand strategies (or 'credos') following extensive field analysis of what worked for those brands who followed in Avis' pioneering footsteps.
At about the same time as Morgan was publishing his findings, the Harvard Business Review ran an article written by K L Keller which assessed the attributes of a selection of the world's strongest brands, found ten traits that were common to them all. It makes thought-provoking reading to compare the two studies, to explore the contrasts between what sustains brand leaders, and what nourishes their challengers.
It is no surprise that there are fewer surprises in the Harvard list; after all, most of our marketing text books have been built around the case studies of the rich and famous brands, and few marketing professionals would readily admit to deliberately flouting any of the following ten characteristics of strong brands:
By contrast, the approach that Morgan recommends in 'Eating the Big Fish' flies in the face of many of these time-honoured precepts. For example, one of his eight credos is that a challenger brand should be prepared to break with its immediate past, which would certainly contradict 'rules' 2 and 5 above which stress evolution above revolution, and the sacrosanct nature of a consistent positioning. What 'breaking with the immediate past' advocates is that an understanding of the times when a brand was at its strongest can be more important than adhering to a linear process of development from the territory the brand has explored most recently.
A good local example would be Carling Black Label, a brand which was South Africa's favourite beer for a while in the late 1960s and early 1970s. But its relevance to the mass market gradually faded and its volume share followed suit, dropping ultimately to a low single figure share nadir, a state of affairs that any number of new positioning and communication strategies failed to reverse. Then came a proposal to SAB from advertising agency Ogilvy & Mather, opening with the memorable insight that 'when Carling rode tall, it rode with the cowboy'. The cowboy was by no means Carling's immediate past, but it was the icon of its heyday, and by retranslating this potent but irrelevant symbol of honest masculine endeavour to a modern, urban blue-collar environment, the agency and client collectively turned the brand around. By bravely embracing a radical break with the brand's immediate past, and eschewing mainstream theories of steady-state evolution, a challenger brand was successfully revitalised.
Another point of comparison between the strategic needs of brands either side of the leadership divide can be found in Morgan's observation that challengers should seek to create what he calls a 'lighthouse identity'. This is in sharp contrast to the classic marketing mantra which demands that customer needs are paramount and that brands are merely there to meet them as best they can (points 1 and 2 - at the very least - on the Harvard list). 'Lighthouse' brands take a contrary view; they adopt a stance that seems appropriate to them as much as to the consumer, and then illuminate what they offer by shining a very bright light on their proposition, on what they are. They say, in effect, 'here I am, here's what I stand for, is there anyone out there who's interested?'
This is an approach that is based more on making a memorable brand statement than on addressing core consumer needs. A good example of a 'lighthouse' brand would be The Body Shop, which chose to put ethics in business ahead of more obvious commercial opportunities in the personal care category. And like a lighthouse, consumers knew exactly where the Body Shop stood, and where to find it, and even though conventional market research would almost certainly have shown that ecologically-sound cosmetics were low on the scale of significant consumer needs, the brand went on to achieve legendary commercial success.
One further example of the need for lesser brands to behave differently to the leaders is in the way that marketing resources are deployed. Big brands employ the full repertoire of media and techniques, we are told (trait number 7 in the HBR list). So the obvious conclusion is that its smaller competitors should follow suit, marshalling whatever resources can be scraped together to create the appearance of greater size and stature, no matter how thinly those resources might consequently be spread. How many times have we heard the theory that a greater 'share of voice' will eventually and inevitably leader to an increase in market share? Sadly, this 'never mind the quality, feel the width' approach is always ultimately (and truthfully) exposed as a smoke-and-mirrors scam, and sooner rather than later the big bang school of marketing chalks up another expensive failure.
Success, Adam Morgan avers, is more likely to be found in what a challenger brand sacrifices than in the breadth of activity it manages, desperately, to muster. Rather do one or two things superbly well, and earn an appropriate reputation accordingly, than try to fight a stronger enemy on every front. The brands that understand this strategy best, like Nando's or Dr. Martens footwear or Virgin Atlantic Airways, always create the impression of a far larger marketing budget and media presence than is actually the case. Sacrifice creates substance.
As in all good arguments, there is always the exception that proves the rule. So it should come as no surprise that there is one critical issue on which both these otherwise opposing schools of thought agree - that any brand, whether a giant or a minnow, has to maintain a clear and sustained state of differentiation from its competitors. For the Harvard Business Review's brand leaders, it is defined as 'occupying a unique niche in consumers- minds'; for Adam Morgan's challengers, it is all about becoming 'idea-centered' in order to refresh brand propositions and sustain a strong brand/consumer relationship.
Either way, the facts are clear: differentiate or die. Because any idea, proposition or personality that attracts consumer support will equally quickly attract competitive emulation. Imitation may be the sincerest form of flattery, but it is also a constant and pernicious threat to any brand's future success. This is the one issue on which the Davids and the Goliaths all agree.
Eating The Big Fish, by Adam Morgan, published by John Wiley & Sons Inc., 1999
The Brand Report Card, by K L Keller, published in the Harvard Business Review, 2000
Yellowwod Brand Architects.