Fighter brand
In marketing, a fighter brand (sometimes called a fighting brand) is a lower-priced offering launched by a company to take on, and ideally take out, specific competitors that are attempting to under-price them. Unlike traditional brands that are designed with target consumers in mind, fighter brands are created specifically to combat a competitor that is threatening to take market share away from a company's main brand.
A related concept is the flanker brand, a term often found in the mobile phone industry. In the case of flankers, or multibranding, the products may be identical to the main offerings and the new brand is used to expand product placement.
Concept
Use of a fighter brand is one of the oldest strategies in branding, tracing its history to cigarette marketing in the 19th century. The strategy is most often used in difficult economic times.[1] As customers trade down to lower-priced offers because of economic constraints, many managers at mid-tier and premium brands are faced with a classic strategic conundrum: Should they tackle the threat head-on and reduce existing prices, knowing it will reduce profits and potentially commodify the brand? Or should they maintain prices, hope for better times to return, and in the meantime lose customers who might never come back? With both alternatives often equally unpalatable, many companies choose the third option of launching a fighter brand.
When the strategy works, a fighter brand not only defeats a low-priced competitor, but also opens up a new market. The Celeron microprocessor is a case study of a successful fighter brand. Despite the success of its Pentium processors, Intel faced a major threat from less costly processors that were better placed to serve the emerging market for low-cost personal computers, such as the AMD K6. Intel wanted to protect the brand equity and price premium of its Pentium chips. But it also wanted to avoid AMD gaining a foothold into the lower end of the market. So it created Celeron as a cheaper, less powerful version of its Pentium chips to serve this market.
Examples
- Australia: Qantas launching Jetstar to take on Virgin Blue
- Canada: Rogers Communications launching Chatr to take on Mobilicity and Wind Mobile[2]
- UK: British Airways launching Go to take on Ryanair and EasyJet
- USA: General Motors launching Saturn to take on Japanese imports into America
- Germany: Merck & Co. launching Zocor MSD to take on generic brands and protect Zocor in Europe
- Russia: Philip Morris launching Bond Street to take on local brands and protect Marlboro
References
- ↑ Hyatt, Josh (December 1, 2008). "And in This Corner, the Price-Fighter". CFO Magazine.
- ↑ "Mobilicity prepared to take legal action over Chatr". Retrieved 13 February 2012.
- Ritson, Mark (October 2009). "Should You Launch a Fighter Brand?". Harvard Business Review.