Celeste has worked in the online marketing space for twenty years. She has written for sectors including tourism, sustainability, education, lifestyle, food, and marketing. You can find her work featured by Green Building Media South Africa, Stodels Gardening, and The Post House Hotel. In magazines, you may have seen her in The Cape Times, Oprah South Africa, and The Property Magazine. While you can find her writing up on the latest SEO trends and exploring digital techniques during the day, her love of story-telling carries on in enriched games and books after hours.
“What is a challenger brand?” is a question that seeks to understand brands that aim to disrupt established market leaders by offering innovative products and bold marketing campaigns. Its a term that surfaces as a buzzword and then goes quiet for a little while.
But then a brand does it and does it well, and everyone is all over it again, trying to figure out what a challenger brand is. Being a challenger brand takes a lot of innovation and creativity, with bold marketing strategies. The combination disrupts the status quo and results in an explosion for the brand.
Let’s get into what a challenger brand is and get examples. This page will cover the following:
Keep reading to learn more about a challenger brand and if you can become one.
What is a challenger brand?
A challenger brand is a company that aims to redefine its industry by challenging the dominance of market readers. Now, what do I mean by that?
So, the company doesn’t just follow norms established by competitors. It strives to offer a unique value proposition that will set it and its products or services apart.
Key characteristics and challenger brand examples
So now that you know the answer to the question, “What is a challenger brand”, let’s explore some key characteristics and examples. Since challenger brands are always pushing boundaries, it’s difficult to shove them in a box and label it. They are an organic, mutating, growing thing that cannot be defined. However, there are certain, shall we say, ingredients that form a common ground for them. The following are challenger brand examples and their characteristics:
Tesla: Bold positioning
A great example here is Tesla. Bold positioning is about a distinct stance in the market. They are not afraid to be different and make their differences known. Tesla doesn’t sell electric cars as much as they sell the idea of simplicity, innovation, and efficiency.
Yes, they sell cars, but their message is that they are accelerating the world’s transition to sustainable energy. They challenge traditional car manufacturers to modernize and call on them to help with their quest to reshape the industry.
AirBnB: Innovative thinking
For years, no centuries, the concept of a hotel has never been challenged. Taverns, Inns, B&Bs, Hotels—the name might alter, but the idea is stagnant. A building built for the purpose of temporary housing for people going somewhere or staying somewhere other than home.
Until AirBnB.
Now, you go someone, and someone else stays in your home. AirBnB created a platform that allows people to rent out their homes and allows for a community-driven. You can travel and stay in another person’s house while they are traveling to someone else’s house.
Brands like AirBnB thrive on innovation. They produce groundbreaking products or concepts with unique marketing campaigns. They are constantly seeking new ways to disrupt our definition of what a product should be.
Warby Parker: Purpose-driven
Warby Parker is an interesting challenger brand examples, as the company touched on two aspects of being a challenger brand. Their actual business model of being a direct-to-consumer model caused a disruption in the optical industry. By cutting out the middleman, Warby Parker can give affordable, and fashionable eyewear direct.
But there is also another way they disrupt the industry. Warper Parker has a social mission to donate glasses to those in need every time a pair is sold. The brand is driven by a strong sense of purpose.
This is often a characteristic of a challenger brand. They tend to align themselves with social, environmental, or cultural causes that resonate with their customers. By telling their brand’s story, it creates a deeper connection and encourages brand loyalty.
Dollar Shave Club: Agility and customer-centric approach
I’ve saved the best for last. The Dollar Shave Club has been rocking not only the shaving industry but the advertising one as well. They are a great example of innovative marketing and engagement with their customers.
Subscription model: The concept of disposable shavers is not new. Larger shaving brands have been selling packets of them for eons. But to take the concept of a disposal shaver and rename and reconceptualize it as a “subscription model” turns the whole thing upside down.
Witty marketing: If you just sit and think of the last shaving brand advert you watched or saw, it would be something professional. Like many brands in the beauty character, they often go for close-ups, play epic cinematic music and often have water-splashing shots. But Dollar Shave Club knows its customers. They aren’t complicated or beauty models. They are fun-loving people. By making their advertising witty and customer-centric, they identified gaps in the market. They knew their customers just wanted a shaver that worked.
Misconceptions about challenger brands
While sometimes they operate with a chip on the shoulder and use their “underdog status” as a motivator, this doesn’t necessarily mean it’s a criterion. In fact there are a number of misconceptions about what it means to be a challenger brand that can cloud our understanding of the concept. Here are some common misconceptions:
You have to be a start-up to be a challenger brand
Not true! An example of this would be Samsung. The company was founded in 1938 and grew from a trading business to include electronics, shipbuilding, and construction. In the early 2000s, Apple was a dominating force in the smartphone industry. They had innovation on their side, plus a sleek design and strong brand loyalty.
However, Samsung altered its brand guidelines and focus and became a challenger brand to compete with the iPhone. It launched the Galaxy series, creating an affordable option as well as a premium one. The smartphone industry, which used to just be for the elite, blew right open.
Challenger brands are radically different
Another misconception. A brand does not have to be completely different from its competitors in order to be a challenger brand. A company can be similar, it’s all about identifying specific pain points or areas of improvement within their existing market. The way they approach the points and address them is the difference.
For example, look at Target. By any standard, Target is not that much different from other discount retailers. But in the 1990s and even early 2000s, Target realized that if they took the principles of a smaller retailer and applied them to the larger discount retailer, it would disrupt the standard of wholesale shopping.
Pain points that they focused on revolutionizing were:
Increasing the customer experience with clean, organized, and visually appealing stores.
Include more premium or fashionable products without increasing the price range
Changing their slogan to “Expect more. Pay Less” emphasizes the point that they were high-quality, but at good value prices.
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