In marketing, a “fighter brand” is a lower priced
offering launched by a company to take on, and ideally
take out, specific competitors that are attempting to
underprice them. Unlike traditional brands that are
designed with target consumers in mind, fighter
brands are created specifically to combat competition
threatening to take market share away from a
company's main (premium) brand. Properly executed,
a fighter brand fends off low-cost rivals while allowing
a company’s premium brand to stay above the fray. But
the long list of failed fighter brands shows how hard
they are to pull off.
QUESTIONS
• Will it cannibalize the premium offering?
• Will it succeed to fend off the competition?
• Will it be profitable?
• Does it appeal to the price-conscious segment?
• How much management time will it consume?
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. 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 may never come back?
With both alternatives often equally unpalatable,
many companies choose the third option of launching
a fighter brand.
SUCCESSES
• SMH GROUP with SWATCH (multiple premium
brands).
• P&G with LUV (premium brand: PAMPERS).
• PHILIP MORRIS with BOND STREET (premium brand:
MARLBORO).
FAILURES
• KODAK (failure FUNTIME which led to the
cannibalization of its premium branded products
due to unclear positioning).
• MERCK (lost the patent protection of blockbuster
ZOCOR – introducing ZOCOR MSD at a 15%
discount – 30 generic products by the competition
were offered at 90% discount and took over the
market within a short period).
• GENERAL MOTORS failed with its value segment
brand SATURN intended to fight TOYOTA and HONDA
in the US (each SATURN car lost USD 3’000.- per
unit).
A manager will probably never encounter a strategy
as tempting or potentially ruinous as a fighter brand.
Cannibalization of the existing premium brand must
be carefully considered, making sure that the value
equation between the two brands is suitably distinct in
the mind of the customer. It is crucial to make sure
that the fighter brand is competitive enough to
damage the enemy and profitable enough to continue
to do so over the long haul. Strategic implications
concerning resources should be considered carefully in
a period when focus and investment are crucial.