There is a difference between a disruptor brand and a challenger brand. So, get it right!

Every day I see people mess up by randomly using the key marketing words disruptor brand and challenger brand. I guess these words seem to convey an attitude that makes people think they are buzz words. But when it comes to strategy, they are quite different. The common link is they both take on an aggressive war games approach.

The disruptor brand takes on an entire category, by appearing so new and different. Once consumers see what they offer, all the current players seem outside of what consumers now want. The disruptor brand is a blue ocean strategy, so different, they appear to be alone on an island, far away from any competitors. Current competitors have two options to the disruptor; ignore or attack back. The problem is they are not be prepared to attack back. Any attempt to try to oppress the disruptor brand brings attention to the disruptor and fuels their cause.

On the other hand, the challenger brand takes on the leading power player brand and shifts the perception of the leader, and set themselves up as the winner of this war. A challenger brand is a red ocean strategy, so close to the category leader, they are defiant in their attack. The category leader has two choices to fight the challenger brand; attack back or be killed. This is the reason I always say that a challenger brand should reposition the leader’s strength into a weakness, as it handcuffs the leader’s ability for the brand to attack back.

Evolution of brand strategy

Brands must evolve their strategy as they move from the craft brand to the power player brand

Many brands start in someone’s garage or over a kitchen table at midnight. Start-ups should deploy a craft brand strategy. To stand out, you must be utterly different to a core group of trend influencers who are frustrated with the major competitors.  

As your brand grows, you can transition to a disruptor brand strategy. Utilize your core audience of trend influencers to gain a core base of early adopters. While a craft brand attracts the attention of trend influencers, the disruptor brand must dial up their aggressive stance and call out the major brands.  

As your brand continues to grow, you can use your increased resources and power to take on a challenger brand strategy against the leader. You can use the influence of the trend influencers and early adopters to attract the early mass audience.

At the power player stage, the strategy shifts to maintaining your leadership position. You should take on a defensive strategy, to attack in response to any player who threatens your brand. While the trend influencers and early adopters played a considerable role in making the brand a household name, you have to be comfortable that your earliest brand fans will eventually leave your brand and look for what is next. 

How to find your space in the market to win

To find the competitive space in which your brand can win, I introduce a Venn diagram of competitive situations that we will use throughout this discussion.  

You will see three circles. The first circle comprises everything your consumer wants or needs. The second circle includes everything your brand does best, including consumer benefits, product features or proven claims. And, finally, the third circle lists what your competitor does best.

Your brand’s winning zone (in green), is the space that matches up “What consumers want” with “What your brand does best.” This space provides you a distinct positioning you can own and defend from attack. Your brand must be able to satisfy the consumer needs better than any other competitor can.

Your brand will not survive by trying to compete in the losing zone (in red), which is the space that matches the consumer needs with “What your competitor does best.” When you play in this space, your competitor will beat you every time.

As markets mature, competitors copy each other. It has become harder to be better with a definitive product win. Many brands have to play in the risky zone (in grey), which is the space where you and your competitor both meet the consumer’s needs in a relative tie.

There are four ways you can win the risky zone:

    • Use your brand’s power in the market to squeeze out smaller, weaker brands.
    • Be the first to capture that space to earn a reputation you can defend
    • Win with innovation and creativity to make your brand seem unique
    • Build a deeper emotional connection to make your brand seem different

Sadly, I always have to mention the dumb zone (in blue) where two competitors “battle it out” in the space consumers do not care.  One competitor says, “We are faster,” and the other brand says, “We are just as fast.” No one bothered to ask the consumer if they care about speed. Both brands are dumb.

So, what is a challenger brand?

Challenger brands must change the playing field by amplifying what your brand does best while simultaneously repositioning the power player brand you want to take down.

While your first instinct would be to attack the power player’s weakness, the smarter move is to reposition one of the power player’s well-known strengths into a perceived weakness. This strategy helps move the power player brand outside of what consumers want.

When you attack a power player brand, be ready for the leader’s potential defensive moves and anticipate a response with full force, as the power player brand has more significant resources than you. You also need to be highly confident that your attack will make a positive impact before you begin to enter into a war. The worst situation is to start a war you cannot win, as it will drain your brand’s limited resources, only to end up with the same market share after the war.

Since the power player leader tries to be everything to everyone, you can narrow your attack to slice off those consumers who are frustrated with the leading brand. Tap into their frustration to help kickstart a migration of consumers away from the leader. If you can gain these lost consumers, you can quickly change share positions.

Example of challenger brands

One of the best examples of a challenger brand that made significant gains is the Pepsi Challenge from the 1970s. It was a direct offensive attack on Coke. In blind taste tests, Pepsi was the preferred brand. Pepsi is a much sweeter taste, so in a quick hit, it was the chosen brand. Coke is an acquired and memorable taste. The blind taste test took away the Coke brand name and the emotional feelings of that brand. At the same time, Pepsi amplified its strength as the “new generation” and positioned the brand as the solution to consumers ready to reject the “old taste” of Coke. This approach was so powerful it was even a contributing factor to the launch of a sweeter “New Coke.”

Then, what is a disruptor brand? 

Disruptor brands move into a blue ocean space, all by themselves. They use a new product, distribution channel, target market or price point. They are so different they appear to be the only brand that can satisfy the consumer’s changing needs.

When successful, the disruptor brand repositions the major players, making them appear unattached to consumers.

While everyone wants a game-changer, it is a high-risk, high-reward competitive situation. The trick is you have to be “so different” to catch the consumer’s attention and mindshare. Being profoundly different increases the risk you may fail. Also, your success may invite other entrants to follow. At that point, you become the new power player of the new segment. You have to continue attacking the major players while defending against new entrants who attack your brand.

Examples of disruptor brands

Uber, Netflix, and Airbnb are contemporary brands that effectively use modern technology to create such a unique offering that they cast major category-leading brands or entire industries as outdated and outside what consumers want. Uber disrupted the taxi market, Netflix is revolutionizing the way we watch TV, and Airbnb has had a dramatic impact on hotels. These brands have a smarter ordering system, better service levels, and significantly lower prices.

My new book, Beloved Brands, coming this spring.

How this Beloved Brands playbook can work for you. The purpose of this book is to make you a smarter brand leader so your brand can win in the market. You will learn how to think strategically, define your brand with a positioning statement and a brand idea, write a brand plan everyone can follow, inspire smart and creative marketing execution, and be able to analyze the performance of your brand through a deep-dive business review.

Beloved Brands: Who are we?

At Beloved Brands, our purpose is to help brands find a new pathway to growth. We believe that the more love your brand can generate with your most cherished consumers, the more power, growth, and profitability you will realize in the future.

The best solutions are likely inside you already, but struggle to come out. Our unique engagement tools are the backbone of our strategy workshops. These tools will force you to think differently so you can freely generate many new ideas. At Beloved Brands, we bring our challenging voice to help you make decisions and refine every potential idea.

We help brands find growth

We start by defining a brand positioning statement, outlining the desired target, consumer benefits and support points the brand will stand behind. And then, we build a big idea that is simple and unique enough to stand out in the clutter of the market, motivating enough to get consumers to engage, buy and build a loyal following with your brand. Finally, the big idea must influence employees to personally deliver an outstanding consumer experience, to help move consumers along the journey to loving your brand.

We will help you write a strategic brand plan for the future, to get everyone in your organization to follow. It starts with an inspiring vision that pushes your team to imagine a brighter future. We use our strategic thinking tools to help you make strategic choices on where to allocate your brand’s limited resources. We work with your team to build out project plans, creative briefs and provide advice on marketing execution.

To learn more about our coaching, click on this link: Beloved Brands Strategic Coaching

We make Brand Leaders smarter

We believe that investing in your marketing people will pay off. With smarter people behind your brands will drive higher revenue growth and profits. With our brand management training program, you will see smarter strategic thinking, more focused brand plans, brand positioning, better creative briefs that steer your agencies, improved decision-making on marketing execution, smarter analytical skills to assess your brand’s performance and a better management of the profitability of the brand.

To learn more about our training programs, click on this link: Beloved Brands Training

If you need our help, email me at graham@beloved-brands.com or call me at 416 885 3911

Graham Robertson bio