Challenger brands transform existing categories or create new ones by questioning the status quo and forcing leaders to change. Positioning is arguably more important for challenger brands entering existing categories than for 'breakthrough' brands creating new ones. Breakthrough brands can get by on their value propositions and origins stories alone to build awareness and credibility, at least for a while. However, in a competitive category, they are not adequate to convert prospects who are already satisfied with their current brand(s) or solutions, and see no reason to switch. To successfully take business from established brand leaders, challenger brands need a compelling, differentiated positioning.
Getting the story right from the beginning creates a solid foundation for brand building that will sustain the company over time. Yet, challenger brands face unique positioning hurdles. In most cases, they only offer minor functional differences or their differences can be difficult to explain. In many cases, there are other challenger brands going after the same customers. Adding to the challenge, they typically have little customer data to inform decisions about targeting, key benefits or the competitive frame of reference – that is, where business will actually be sourced.
Fortunately, functional differences are not the only way, or even the smartest way, to differentiate a challenger brand.
We identified six examples of new brands in footwear and beverages, arguably some of the most competitive, well-established categories around, that found alternative ways to effectively position themselves as different from their competitors and win customers without relying on product differences alone.
In the beverage category, Fever Tree mixers focuses on a unique customer experience, while BodyArmor is rocking the sports drink world with elite athlete endorsements and a new MLS partnership. White Claw is using a breakaway positioning to take share from beer rather than other 'hard' or spiked beverages.
In the footwear category, three new brands are competing at opposite ends of the style and price spectrum. Office of Angela Scott emphasizes women's empowerment, Supreme makes customized streetwear cool through scarcity, and Allbirds is the antithesis of sexy with practical, affordable eco-smart footwear for the whole family.
We've created mini cases and reverse engineered each brand’s positioning to make our point: positioning is critical, and it doesn't have to rely on product differences to be effective.
Click here to learn more about challenger brands and read the six mini cases.