The Whiteboard: What's it take to succeed as a challenger brand? Be ready to walk the walk
Nokia was once the leader in the mobile phone category. During the rapid expansion of personal cellphone use in the late '90s and early '00s, Nokia reached 40 percent global market share, far higher than any competitor.
But as technology developed rapidly, Nokia was slow to respond. It lost its lead as first BlackBerry and then the iPhone reduced its brand to an also-ran.
In a recent article in Ad Age, Nokia's CMO, Tuula Rytilä, said, "For years we were the leader in our industry. When a leader is (at the top) for a long time, naturally they have more to lose and become more defensive. Now we actually get to act like a challenger."
Of course, this is a very convenient realization, since acting like a leader didn't work out so well, but what does it mean to be a true challenger brand?
There are classic examples of challenger brands that have had relative success: Avis, with the "We try harder" slogan, the Volkswagen Beetle in the Sixties and, of course, Pepsi, with the Pepsi Challenge campaign that is often credited with stampeding the executives at Coca-Cola into creating the New Coke fiasco. (Can you imagine the social media tsunami if that were to happen today?)
Keep in mind one small detail, however: Not one of those brands ever took over the No. 1 slot and held it for a significant period of time.
Point No. 1: Being a challenger brand often means staying a challenger brand.
But let's look at some current examples:
Microsoft's Bing: Its current campaign carries the blustery tagline "Bing it on." Its major factoid is that a blind study of 1,000 people showed that Bing was preferred 2-1 over Google.
Bing is in the right place to attempt a challenge; it is No. 2 at 16 percent market share, according to several sources. But Google seems to be in another weight class at this point with 66 percent share. Bing is believed to be losing more than $1 billion a year as it tries to establish valuable share among Web searchers. And Google prides itself on hiring the best engineering talent out there.
Point No. 2: Being a challenger brand is an uphill climb, and expensive.
Samsung: Having succeeded in the broader home electronics field, especially with good-quality, yet affordable, televisions, Samsung has been growing quickly in the mobile phone arena. Taking a swing at its biggest competitor, a recent campaign mocked Apple iPhone users for waiting in line to get a phone with features the Samsung phone already had.
If there's one thing Ms. Rytilä from Nokia had better figure out soon, it's that Samsung is the true challenger brand in the U.S. mobile phone market right now, not her brand. Samsung phones have hot new features that compete well with iPhone's, they've got money (see point 2) and they've got a great partner for many of their phones with Google's Android operating system.
Which leads me to Point No. 3: If you're going to step into the ring with the heavyweight champion, you had better have the product to throw some serious punches, because the champ is going to punch back.
Apple, by the way, finds itself in a unique position, where its phones are dominant but it has kept up the challenger mentality for its computers with the sly "Hi, I'm a Mac …" campaign. As I've mentioned in the past, Apple is an example of a challenger brand that succeeded but, ironically, it never dominated in its original business of personal computers, despite being innovation leaders in the category.
Americans love an underdog, so the challenger mentality can help a brand gain traction in the marketplace. But declaring yourself a challenger brand is one thing, while really having what it takes to continually peck away at the leader in the market is another.
I seriously doubt that Nokia has the money, the products or the vision for its brand to take on Apple and Samsung. Its best shot might be to buy Research In Motion, the owners of BlackBerry, the once-dominant brand that has fallen below serious challenger status as well.
One final point: Don't "act" like a challenger, as Ms. Rytilä put it. Go all in or stay out. Being a challenger brand is not for the faint of heart.
David Taylor is president of Lancaster-based Taylor Brand Group, which specializes in brand development and marketing technology. Contact him via www.taylorbrandgroup.com.