BY Kathy Crosett
Are some of your accounts struggling as challenger brands? These are typically small businesses trying to get noticed in a well-established category. Decades ago, Ben & Jerry’s famously faced the problem of expanding the market for their premium ice cream when they were up against huge competitors. Your accounts can copy their success with the right strategies.
What Challenger Brands Offer
A start-up business in an established category is usually the vision of a founder who wants to offer something better and different. And while their vision is exciting, they may lack the marketing resources to make a big impact in the traditional way.
As traditional distribution chains have been disrupted, and consumers embraced e‑commerce, challenger brands found their footing through a direct-to-consumer approach.
What Consumers Think About Challenger Brands
The best way to help your accounts with challenger brands is to understand the audience they are trying to reach. MX* Labs recently surveyed 400 U.S. adults regarding their opinions on unfamiliar brands.
The results of the research show interesting variation by age group and by product category under consideration for purchase.
Differences by Age
Around 76% of consumers are very or somewhat likely to buy a brand that is unfamiliar to them. Overall, women appear to be more open to these purchases (57%). Interestingly, around 67% of 55–64-year-olds will also try a new, smaller brand.
Motivation
Consumers have a few different reasons for buying a brand that they’re not familiar with.
Price
For nearly half, 48%, price is the driving factor. Price is very important (71%) to consumers with income below $35K.
Brand Reputation
Regardless of whether it’s true, surveyed consumers believe smaller brands are “more ethical and socially responsible.” This attitude drives 65% of consumers to consider purchasing from these companies. Younger consumers, in the 25–34 year-old age group, are more likely to strongly agree (30%).
Overall, consumers indicate the following factors motivate them to purchase from challenge brands:
- Lower prices/better value 48%
- Unique/innovative products 39%
- Curiosity/desire to try something new 38%
- Want to support small businesses 37%
- Recommendation from friends/influencers 33%
Are Consumers More Open to Challenger Brands in Specific Categories?
MX8 researchers point out that “consumers are most likely to try challenger brands in categories that feel lower risk.” While they don’t define risk, it likely encompasses the cost of purchase and the potential loss if a consumer can’t use the product as intended.
Around 70% of consumers are willing to explore the food and beverage category and 50% say the same about apparel and accessories.
The numbers are a bit lower for home goods brands (41%). Once again, older consumers, ages 55 to 64, show more willingness to spend money on a challenger brand (62%).
On the other hand, only 20% of consumers will select a tech/electronics product from a challenger brand. They may be concerned about compatibility with existing equipment.
In addition, only 16% of parents are willing to purchase a challenger brand for their children or babies. In this case, they may be concerned about basic safety.
How to Reach Consumers with Challenger Brand Marketing
Challenger brands that can convince a few consumers to give their product a try are in a sweet spot. Often these consumers can be called trendsetters. According to AudienceSCAN research from AdMall, nearly 15% of consumers fall into this category. Advertising through local media is a key way to reach these consumers. Around 88% say that local media helps them determine which products to buy.
Trendsetters may also be the people who talk about challenger brands. Overall, around 48% of consumers say they discover new brands through word of mouth.
Consumers also learn about new products through search (41%) and social media (39%). If your accounts aren’t using these formats to increase consumer awareness, they should be. In addition, around 19% of challenger brand fans have been made aware of new products by influencers.
Summary
The creators of challenger brands face a demanding market. They need to position their product to appeal to trendsetting consumers by emphasizing unique or innovative features. To maintain growth, their branding and promotional messaging must connect with their target audience. Media sales reps can help them achieve these goals by using market and audience intelligence available in AdMall.
Image by Startup Stock Photos on Pexels.
