Challenger brands are defined by their mindset rather than size, characterized by attributes like boldness and self-awareness, aiming to gain market share through thought leadership rather than higher spending. They follow eight creeds focusing on breaking conventions, building strong identities, sacrificing aspects of their strategy, and enter popular culture. Examples of international challenger brands include Pepsi and Virgin, which demonstrate these principles effectively.

1. source: http://popesmule.tumblr.com/post/1241159521
Challenger Brands
© DirectionGroup 2013

2.  Common misconception is that
challengers are small in size…not
true!
 Challenger is a mentality, it is a
mindset. Not girth. Not breadth.
It’s not how
big it is….

3. Challenger Brand Mentality
Challenger Brands share these attributes:
State of Market: They’re not the #1 brand and not a
niche player
State of Mind: They have ambitions that exceed their
conventional marketing resources
Rate of Success: They are succeeding, not merely
ambitious or arrogant
Challenger Brands understand that:
The market leader is already top of mind.
Everything you need to know
about Challenger Brands is
in this book!
They can’t outspend the leader. The best chance they
It’s the DirectionGroup Bible!
have to gain share is by being the mindshare leader.
To win mindshare takes thought leadership.

4. How to Tell if You’re a Challenger Brand
Do any of these characteristics fit you or your
organization?
›
Maverick/Risk-Takers/Bold
›
Aggressive/Determined
›
Self-Aware
›
In a Hurry
›
Intense/Confident
›
Intrusive and Unapologetic
›
Thought Leader
›
Keen to Fund Marketing and Public Relations
Efforts to Move the Brand Ahead
If you’ve
ticked at least
50% from this
list, chances
are you are a
Challenger
Brand!
4

5. International challenger brands
1. Pepsi:
Taste of new generation
vs. Coke
2. Burger King Make it your way
vs. McDonalds
3. Apple:
Think Different
vs. IBM
4. Virgin:
Irreverence, Entertainment
vs. British Airways
5. Dell:
Direct to Client
vs. IBM
6. Domino’s:
Home Delivery
vs. Pizza Hut
7. Beetle
Think Small
vs. Ford
8. Avis:
We try Harder
vs. Hertz

6. Avis – we try harder

7. 8 credos of the challenger brand
1.
Break with your immediate past
2.
Build a Lighthouse Identity
3.
Become the thought leader
4.
Create Symbols of Re-Evaluation
5.
Sacrifice
6.
Over commitment
7.
Enter Popular Culture
8.
Become Idea-Centered, Not Consumer-Centered

8. The 1st Credo: Break with your immediate past
What does it mean?
Don’t be afraid to ask “dumb” questions to challenge convention in order for
consumers to view your brand differently (e.g. How would Microsoft do it?)
Challenger Brands absolutely ignore the assumptions about the category in which they compete
Challenger Brands must determine new criterion for how value is defined in their category
Challenger brands reject:
•
One or other fundamental dimension or driver of their category
•
An aspect, dimension or quality that the Market Leader exhibits
•
The generally perceived culture of the category
•
Some aspect of the way the consumers experience or shop for the product
Examples Dell, FirstDirect Bank

9. The 2nd Credo: Build a Lighthouse Identity
What does it mean?
Developing a very clear, unique sense of who or what you are as a brand/company and
why it matters, then projecting that identity intensely and consistently
Challenger Brands develop a very clear sense of who they are and what they stand for
They project that identity so intensely that the consumer is forced to notice them
Challenger Brands over-engineer their products, offering the consumer dramatically superior
performance on some dimension (e.g. price, durability)
“Lighthouse” brands proudly tell consumers where they stand in strong, emotional terms
Examples FCUK, Innocent
smoothies, Body Shop

10. The 3rd Credo – Become the Thought Leader
What does it mean?
Break convention in terms of how the brand represents itself (what you say), where you
say it (medium), and experience (beyond just talk).
Marketers talk as if there is one leader in every category. But there are two:
1.
Market leader– the brand with the biggest share and the biggest distribution
2.
Thought leader – the brand that, while it may not be the largest, is the one that everyone is
talking about, that has the highest “sensed momentum” in the consumer’s mind.
Challenger Brands strive to become the thought leader.
They must educate consumers that the criterion for choice as defined by the Market Leader are
not the only ones
Examples Lexus, Virgin
Atlantic, Bodyshop

11. The 4th Credo – Create a Symbol of Re-evaluation
What does it mean?
Challengers establish symbols designed to prompt quick re-evaluation by consumers and
enhance their view of the brand.
It’s not the big that eat the small. It’s the fast that eat the slow.
Challenger Brands are always in a hurry!
They must act swiftly and powerfully to puncture the consumer’s autopilot and create re-appraisal
of themselves.
Bold, impactful acts or marketing ideas capture the imagination of indifferent consumers
conditioned by the messaging of the market leaders
They often pose startling juxtapositions that prompt consumers to sit up and rethink some of their
assumptions
Examples Dyson, Swatch, Wonderbra

12. The 5th Credo – Sacrifice
What does it mean?
Challengers must sacrifice the assumptions of the market. Laser-focus your
target, message, reach, frequency and distribution. Recognize that less can be more.
Challenger Brands make sacrifices because they are single-minded which helps them stand out
Challengers usually have fewer resources in almost every aspect of the business and marketing
mix than the market leader
All secondary and tertiary targets are sacrificed in favor of their one, clear, focused strategy
Examples Southwest Airlines, KiteKat

13. The 6th Credo – Overcommit
What does it mean?
Although you may do fewer things, but when you do you must do them bigger and better!
Ironically brands must also Overcommit on a small number of key activities to succeed
Challengers should anticipate resistance and inertia and by overcommitting attempt to remove
those potential barriers.
Challengers do not succeed through just being committed to challenger status; they succeed
through over-commitment.
Challenger Brands over commit because they have to.
Challenger Brands think about barriers and actively remove them before they occur.
Examples Red Bull, Zappos

14. The 7th Credo – Enter Popular Culture
What does it mean?
Unconventional and bold communications can really cut through and get people talking!
Challenger Brands leverage communication, bold advertising and publicity to appeal to
consumers’ broader social needs.
Challengers create and enjoy strong folklore becoming a reference in popular culture and word of
mouth.
By creating social salience Challenger Brands punch above their media weight.
Examples KiteKat, Boddingtons, Haagen
Dazs

15. The 8th Credo – Be ideas centred, not consumer-centric
What does it mean?
Sustain challenger momentum by not losing sight of what the brand is about and can be.
Ensure your marketing to reflects this vision.
Success is a sugar rush – it causes brands and people to stop behaving in the way that made
them successful to begin with.
A Challenger Brand maintains momentum by ensuring it is focused on the generation of ideas
that constantly refresh and renew the way the consumer experiences the brand.
Challenger Brands are always on the move, they can never afford to be static!
Examples Head &
Shoulders, Playstation, The Independent

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