Fighter Brands : perverted marketing ?


My desk today @ the UWF Starbucks

Currently studying at the University of West Florida, I’m enrolled into the Marketing Strategy course from Dr. Keller one a subject we’ll discuss is the concept of Fighter Brands (or Finghting Brands). In Should You Launch A Fighter Brand?, Mark Ritson from the Melbourne Business School says that “a fighter brand is designed to combat, and ideally eliminate, low-price competitors while protecting an organization’s premium-price offerings” (it is therefore different  than the “marque combat” as defined by the Georges Chétochine). Successfull fighter brands are examples such as Busch Bavarian beer, Intel Celeron processors, Logan by Renault etc.

Qantas launched Jetstar, the "perfect fighter brand" according to Mark Ritson (Picture retrieved from the Sydney Morning Herald website : http://www.smh.com.au)

Different evolutions may explain the emergence of fighter brands : the growing market share of private labels, the trends of low-cost products, the infidelity of customers, their ever-changing expectations or simply the current economic crisis… At school we attented a presentation of the French research and survey organization CREDOC in which we were told that the French’s appreciation of low-priced products compared to branded products sank in 2009. Even if sales of private labels now reaches 34% of the supermarkets’ sales in France, brands’ products are still perceived better quality. This shows that consumers still trust brands and value their products, but may don’t necessarily ask for premium products (anymore) : an insoluble equation ?

No, they launch their fighter brands ! This post from another wordpress-blog (lowcostattitude, in French) gives some example of “popular products” launched by Nestlé, Danone &co. As our CEDOC-lecturer told us in his presentation too, we can see that the middle of the product ranges are deserted in favor of premium and low-cost products, using the hourglass-analogy. Brands have to keep customers tempted by low-cost and/or private label products as well as recuperate those who already deserted… but it’s far more complicated than that : Will it cannibalize the other brand’s portofolio’s products ? What should I highlight in the new alternative that I offer ? Will customers be lost ? How much does it cost to launch a fighter brand ?

Saturn cars' sales pulled up immediately in 1990... but GM's company -who was a long-time sponsor of cycling : here's Ivan Dominguez riding for Saturn-Timex in 2003- was a financial disaster. (Picture retrieved from dailypeloton.com)

One example is the automotive brand Saturn, launched by General Motors in 1985 to counter the Asian competition making affordable and practical, fuel-efficient cars. As described by Mark Ritson in his article published on October 2009 in the Harvard Business Review, the cars “proved an immediate success and quickly achieved the highest repurchase rates and customer satisfaction scores in the industry“. The cars were cheaper than GM’s products… but were far too expensive to actuallty produce. Very high develoment costs, an expensive production plant, dedicated dealer-network and an independent marketing & branding budget : the business model simply wasn’t profitable !By 2000, despite continuing sales success, Saturn was losing $3,000 for every car it sold“, says professor Ritson in his article. General Motors eventually reformed the whole brand, amongst which was the higher integration of the brand into GM, “and then sales dropped off“. The current crisis, striking GM as hard as the other Big Three, will lead to the definitive shut down of Saturn by October 2010. Renault is doing better with it’s Logan brand…

Why perverted marketing ?

As my Marketing Management book states : “the marketing concept means that an organization should seek to make a profit by serving the needs of customer groups“. Therefore, marketing originates with the unfulfilled need of customers to offer them a product which suits their expectations (eventually the company will promote the product, measure the ROI etc.). Fighter brands emerge from the success of (or the threat posed by) a competitor to which a company creates an alternative offer. In other words : it has a product-oriented vision, dazzled by someone else’s success to push a product in the market. That’s not marketing. And that’s why some companies fail in that strategy ; Kodak launched Funtime, a cheap alternative to its Gold Plus film aimed to counter Fujicolor’s Super G film, but Funtime’s sales cannibalized Gold Plus more than it damaged Super G. Kodak eventually withdrew the product. Jetstar is an example of a successful fighter brand : deep analysis of the market allowed them to create a concept aligned with the customers’ needs.

If you are interested in the subject and seek a deeper insight, read Mark Ritson’s article in HBR. Highly interesting !

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