Two pieces of research published recently have offered important insights about the cognitive and emotional factors involved in people’s decision making processes, and particularly those around the selection of challengers. Sounds dusty? It isn’t. Muy importante – bear with me.
The first, a study by the Université Pierre et Marie Curie published in May this year, reported that the human brain ‘is fundamentally unable to cope with three things at once’. In situations where people are faced with multiple choices, the Medial Prefrontal Cortex (MPC) – the part of our brain that drives our behaviour based on the value of rewards – apparently divides itself in two, each half dealing with one choice. But it cannot divide into more than two – so any choice between three or more things needs to be simplified before it can be made.
As Jim Prior at The Partners observed in this blog post shortly after this study came out, it seems that this theory reflects what we see in the brand world. The choice for the consumer in almost every category, no matter how many brands there are in it, often seems to boil down to a choice between just two – certainly in popular culture (Prior cites Pepsi vs. Coke, Burger King vs. McDonalds, Nike vs. adidas). And clearly it is in the challenger’s interests to reduce the perceived choice to that of being just between two brands – in reality their biggest hurdle in over-saturated categories (there are over 500 oralcare SKUs at an American Drugstore chain for example) is visibility and consideration among the static and confusion, static and confusion that otherwise simply serves to preserve existing consumer habits and the status quo. Small wonder that one sees challengers like Apple (a leader with the iPod, a challenger with the Mac), Virgin and most recently Dunkin all deliberately set out to reduce the choice in their category for consumers to just two, by consciously pitching themselves as the Challenger brand going up against the Market Leader. Look, they say. It’s very simple. You can buy this, or you can buy that. That’s all you have to decide.
Challenger brand owners often flinch from this classically direct strategy, either through fear of bringing down the wrath (and spend ) of the leader on their heads, or in the belief that it leads to ugly tactical marketing, which can then drag the consumer’s relationship with the category down. Yet in reality it is possible to do it in a range of tones, from the muscularly persuasive (Powerade), to the winningly charming (Mac), and indeed put it either at the centre of your strategy, or as a component thrust in a bigger campaign (Dunkin). And it is also possible to do it in a way that benefits both sides, as Roger Enrico of Pepsi famously claimed the Cola Wars did.
For the strategic advantages, if you do it well, are considerable. They include:
- Reminding habitual purchasers that there is a choice to be made
- Putting your brand in the key consideration set
- Radically ‘simplifying’ choice in the category
- Redefining the criterion for choice in the category (‘when choosing between these two, this is the question to ask yourself…’)
- Using the opponent as a counterpoint to illuminate your own virtues
- Luring competitors into a response, to spend their money talking about your agenda
Oh, and your Medial Prefrontal Cortex loves it, it seems.
Clearly, however, deciding to set up a two horse race is only the beginning. The second fundamental question to resolve is what is the consumer’s reason will be for choosing us, the challenger in this situation. In the examples we looked at above, we see a variety of strategies here: the Mac plays on product superiority and user identification, for example, while Dunkin set up against Starbucks as a People’s Champion with better products. But the second piece of research lays out more formal and rigorous thinking around a different kind of narrative entirely: perhaps the most classic of all challenger strategies: playing the Underdog card.
The study in the Journal of Consumer Research, by Neeru Paharia, Anat Keinan, Jill Avery and Juliet Schor formally analyses what the authors call an ‘Underdog Brand Biography’ and attempts to understand how and why people respond positively to an underdog backstory in marketing. The authors argue that there is an emerging trend by brands to share a historical account of their underdog status, and look at why that is, and where this strategy does and doesn’t work well. You can find the abstract of it here: http://hbswk.hbs.edu/item/6464.html#pub-2.
If one was picky, one might be tempted to question it being ‘an emerging trend’, given that so much of the model fits what almost five decades of underdog brands from Avis to the early Apple to Snapple to Ben and Jerry’s to innocent have been doing with some success from 1962 onwards, but this is a minor cavil: the emerging range of media channels available to a challenger certainly make it easier than ever before to share one’s story on the one hand as a brand, and to access it as a consumer on the other, and the proliferation of new brands presumably means that these backstories are indeed more common than ever before. And what I really like about the authors’ ambition for the study is the desire to formally prove both the advantages of taking such a stance (from purchase intentions to the effect on brand loyalty) and the four variables in the degree to which people identify with it (whether they see themselves as underdogs as well, for instance).
So my challenge to us is this. Yes, the socio-digital world makes easier than ever before (in principle, at least) to share your Underdog Brand Biography with those that might be drawn to you. And, yes, one does see a number of the newer challengers sharing their backstory in this way – a photo of the founders, stories about how they got started, a statement of their passions and mission, deft sketching of the mountain they have to climb, close with some encouraging early signs of success, and off you go. And, yes, this clearly this is a great human interest story, and a useful start.
But is it enough?
Because of course what is so interesting about putting these two bits of research together is that they lead one to think much more seriously about the strategic imperative of starting a two horse race. Of really leaning into that clarity, and the implications of setting yourself up against the market leader. How to redefine the criterion for choice. How to make the consumer not only engaged in the race, but someone who wins when you do. And how to make the media follow it as enthusiastically as the latest football results, or Cheryl Cole’s malaria.
Two bits of research, that 48 years after Avis defined the classic two horse race, and turned around its business in doing so, spotlight its advantages for a challenger more brightly and more rigorously than ever before.