This is the first of a series of posts leading up to the new brandgym book launch on April 26. You can pre-order here. The book is focused on how to gain and retain brand leadership. And we'll start by looking at why its better to be a "Leader Brand" than a "follower brand".
Being a follower or "challenger" brand has been glamorised in some circles, portraying the brave battle of the little guy against the big bully. This makes it seem exciting and challenging to be the number two or three brand, playing catch-up with the market leader. An example of this is loved and lauded Avis advertising campaign 'We try harder because we're number 2'.
Well, we have a different view. We think that being a leader is better. Much better.
By leadership this could be outright market leadership, such as Tesco or Wal-Mart in supermarkets. Or it could be leadership of a specific sector, defined by target group, channel or price positioning. For example, the Pago brand of juice in France is the dominant leader in cafes, hotels and restaurants.
So, why is being a leader so much better?
Business benefits
Data from the PIMS
institute shows that businesses with large
shares (50%+) have three times the rate of return than small-share
businesses (10% or less). So, it might be cool to be the rebellious number 3 or 4 brand. But, to make money, I feel the need, the need to lead.
Owning the central benefits
Leader Brands tend to own the 'central benefits' of their marketplace. Rather than having a strong image for a specific benefit, they score highly across a range of key attributes. For example, we recently worked with Hollywood chewing gum in France, a brand seen as the best across the board, for taste, freshness, quality and innovation.
This forces follower brands Freedent and Mentos to focus on the secondary benefits of oral care and fun respectively. The key to being a Leader Brand is not differentiation, but rather distinctiveness: creating a memorable and fresh execution of the central benefits of the market.
Bargaining power with retailers
Leader Brands negotiating power with increasingly powerful retailers is a critical advantage. Follower brands are in danger of being screwed for margin, or even being squeezed off the shelf altogether.
Winning the ‘war for talent’
A final advantage is helping attract the best people. This advantage is described in the book ‘The War for Talent’ as follows: “The company’s role in the market place, either as a product or market leader, can prove to be a major pull factor.”
In conclusion, being a follower brand may be fun for a while, but long term being a leader is better.
In the next post we will look at the key principle at the heart of the brandgynm approach to gaining and retaining leadership: "Follow the money".
