Fighter Brand
Encyclopedia
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 brand
s 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.
Use of a fighter brand is one of the oldest strategies in branding, tracing its history to cigarette marketing 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 might never come back? With both alternatives often equally unpalatable, many companies choose the third option of launching 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 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 computer
s, 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.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, 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 brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
s 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.
Use of a fighter brand is one of the oldest strategies in branding, tracing its history to cigarette marketing 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 might never come back? With both alternatives often equally unpalatable, many companies choose the third option of launching 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
Celeron
Celeron is a brand name given by Intel Corp. to a number of different x86 computer microprocessor models targeted at budget personal computers....
microprocessor
Microprocessor
A microprocessor incorporates the functions of a computer's central processing unit on a single integrated circuit, or at most a few integrated circuits. It is a multipurpose, programmable device that accepts digital data as input, processes it according to instructions stored in its memory, and...
is a case study of successful fighter brand. Despite the success of its Pentium
Pentium
The original Pentium microprocessor was introduced on March 22, 1993. Its microarchitecture, deemed P5, was Intel's fifth-generation and first superscalar x86 microarchitecture. As a direct extension of the 80486 architecture, it included dual integer pipelines, a faster FPU, wider data bus,...
processors, Intel faced a major threat from less costly processors that were better placed to serve the emerging market for low-cost personal computer
Personal computer
A personal computer is any general-purpose computer whose size, capabilities, and original sales price make it useful for individuals, and which is intended to be operated directly by an end-user with no intervening computer operator...
s, such as the AMD K6
AMD K6
The K6 microprocessor was launched by AMD in 1997. The main advantage of this particular microprocessor is that it was designed to fit into existing desktop designs for Pentium branded CPUs. It was marketed as a product which could perform as well as its Intel Pentium II equivalent but at a...
. Intel wanted to protect the brand equity
Brand equity
Brand equity is the marketing effects and outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. Fact of the well-known brand name is that, the company can sometimes charge premium prices from the consumer . And,...
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 launches ChatrChatrChatr is a Canadian wireless service provider targeting price-conscious customers It is the third wireless service network owned by Rogers Communications, after Rogers Wireless and Fido Solutions. The provider launched their network in Toronto, Ottawa, Calgary, Edmonton, Vancouver and now Montreal ...
to take on MobilicityMobilicityMobilicity is a Canadian wireless telecommunications provider. Its name is a portmanteau of the words "mobility" and "simplicity".-History:...
and Wind MobileWind MobileWind Mobile is a Canadian wireless telecommunications provider operated by Globalive Communications Corporation. The company initially launched mobile data and voice services in Toronto on December 16, 2009 and two days later in Calgary... - UK: British Airways launch GoGo FlyGo Fly was the name of an award-winning British airline. It was purchased by EasyJet.-History:Bob Ayling, ex-chief of British Airways, approached EasyJet's founder, Stelios Haji-Ioannou, to ask whether he could visit claiming that he was fascinated by how the Greek entrepreneur had made the budget...
to take on Ryanair and EasyJet - USA: GM launches Saturn to take on Japanese imports into America
- Germany: Merck launches Zocor MSD to take on generic brands and protect Zocor in Europe
- Russia: Philip Morris launching Bond StreetBond Street (cigarette)Bond Street is an international brand of cigarettes produced by Philip Morris International.-History:Formerly called "Old Bond Street", the history of this brand goes back to year 1902. Philip Morris, the founder of the company, had a boutique on Bond Street in London...
to take on local brands and protect Marlboro