EATING THE BIG FISH

Preface

Everybody pulls for David, nobody roots for Goliath

- Wilt Chamberlain (1)

In the beginning was Avis. The little fish, aiming to reverse the food chain. And Avis begat the Pepsi Challenge. And the Pepsi Challenge begat Apple 1984. And they all had a love child together called Richard Branson. Who was then knighted by Her Majesty the Queen for services to The Underdog.

And that was the way we thought Challengers went, really. All doing the same sort of thing, all very successfully. All plucky underdogs, all asking us to take a position. All creating the impression that this hugely crowded category was in reality simply a matter of a two-horse race and asking us whose side we were going to take: Were we with the little guy or the big guy here?

And from then on, every decade there seemed to be one new iconic battle between Challenger and leader. And those iconic battles always seemed to take essentially the same

form: Small Challenger makes public challenge to market leader, in open pursuit of column inches, news footage, sympathy, and sales. A charmingly scrappy David against a visible and, now we realize, strangely sinister Goliath. There was nothing wrong in any of these Challengers and everything right about this stance, of course—but it was always at its heart exactly the same stance. David versus Goliath. Yet the past 15 years have seen a remarkable new diversity and flowering of Challenger thinking around us, in three important and distinct senses: the number of brands openly adopting a Challenger stance, the diversity of Challenger stances they have taken, and the change that some of the most successful of these Challengers have made to the fundamental way we think about and interact with long-established categories.

The number of brands openly adopting a Challenger stance

The first significant recent development in the world of Challenger brands is in the number of brands (and other entities—countries and cities, for example) explicitly adopting this Challenger brand stance: Large companies from North America to Singapore to South Africa openly declaring they want and need to think like Challengers, company-wide. And alongside

them we find an even larger number of commentators discussing brands through this explicit lens: If you Google "Challenger brand" today, you find people writing about the Challenger brand approach in business from India to Australia to Mauritius, ranging from the fields of politics to education, via soap powder and social networking sites along the way. The concept and language of a Challenger brand has become a mainstream and explicit part of the marketing landscape (whether it is always fully understood or not).

The Diversity of Challenger Stances

The second key development in Challenger brand thinking over the past 15 years lies in the diversity of Challenger stances we see taken by Challengers in their chosen marketplace. One of the purposes of the second edition of this book, in fact, is to help us intelligently look at options other than the default Challenger model (which one might characterize as essentially a cluster of attributes around the David versus Goliath theme). Understanding this broader diversity, and how we use it to our advantage, is going to be central to our success.

It is not hard to see why there has been this overarching focus, historically, on "David versus Goliath" as to what it really means to be the Challenger. It is undoubtedly partly the

influence of the four iconic Challengers we noted earlier, and how well that stance has worked for them. And may well also be to do with the implicit influence of military metaphor that underlies so much of the language of marketing (targets, share battles, etc.). For what has been the most influential thinking on how a Challenger succeeds within military conflict? The doctrine of guerrilla warfare, whose philosophical authors and successful practitioners in the real world—Che Guevara, Mao, the Viet Cong, Lawrence of Arabia— have made this perhaps the most famous military strategy in the world.

But of course there is a much wider range of Challenger stances one can take than this. For a long time the real scope of the diversity of stances available to us seemed more genuinely more visible in the spectrum of political, rather than business Challengers. At either end of the tonal range, for example, one might put the open confrontation of the rioting Paris students of 1968 on the one hand, and the gentle (but more effective) challenge by Gandhi to the British on the other. In between we have seen political Challengers combine the strident with the charming, the steel with the velvet glove: look at the self-styled "Raging Grannies" who doorstepped President George W. Bush over Iraq, for instance, or the smiling Katharine

Hamnett, chatting cordially with Mrs. Thatcher in Downing Street while simultaneously wearing a T-shirt that screamed "58% don’t want Pershing" (the cruise missiles scheduled to be sited in the United Kingdom). What a brilliant combination of charm and stiletto each wielded—and how intriguing to wonder, we thought, how we as Challenger brands might achieve that kind of potent combination.

But in the recent brand world, too, we are finally coming to see a far richer range of Challenger attitudes, natures, and tones. JetBlue, Red Bull, Flickr, Zara, Linux, innocent—each of these has taken a very different approach in order to succeed. They have had to—for, of course, the stance you take as a Challenger is of necessity heavily influenced by the cultural and category context in which you find yourself. (So, for instance, if there are 150 drinks in the energy drink category, and they are all being irreverent mavericks, then one thing a genuine Challenger to Red Bull is not going to try to be is yet another irreverent maverick. It will need to find a different way to challenge the conventions of the category or the culture around it.)

And with this fresh diversity from both the physical and digital brand worlds has therefore come the ability to better define the potential choices available to us of the different kinds of

stances a Challenger can take in their chosen marketplace. For instance:

i) The Missionary—like Dove, as an agent of change in the beauty category

ii) The Visionary—exemplified by Method’s vision of a relationship with cleaning that transcends functional germ kill

iii) The Enlightened Zagger—typified by Camper’s championship of "slow" in a fast world

iv) The Real and Human alternative—personified by Ben & Jerry's

v) The People’s Champion—a torch famously carried by Wikipedia and Linux

vi) . . . As well as, yes, of course, the stance of the feisty little David

These six different stances, and six others are discussed in detail in Chapter 12. In that chapter we will also go on to explore how the nature of this diversity may shed some insight on how long-lived Challengers successfully and continually renew their relationship with the consumer. It will suggest, in fact, that perhaps the whole notion of how one maintains Challenger longevity lies in

intelligently evolving across this Challenger typology.

The Challenge to the Fundamental way we think about long-established categories

The third key development in the centrality of Challenger thinking to marketing and business is the way in which some of the new Challengers are not simply gaining share or changing brand rankings, but threatening to fundamentally overturn entire categories and our frameworks for thinking about them. Twenty years ago, we saw establishment brands threatened by new Challengers (IBM); now we see the fabric of entire industries and the behavioral cultures we attach to them threatened by this new generation.

Let’s briefly consider some obvious examples. While YouTube is evidently a Challenger to television in terms of offering its own live TV channels as well as being an alternative source of entertainment; it has also in the process in effect redefined our notion of quality entertainment.

Quality in visual entertainment, one could argue, is no longer about wonderful production values or compelling narrative—post YouTube, it is now simply about how good or fresh the idea is and the emotional effect it has on us (and the

person we pass it on to). Wikipedia challenges not only the way we receive authoritative information (Microsoft’s Encarta and Encyclopedia Britannica are casually brushed aside by a site that now accounts for one in every 200 online visits), but also our long-held notions regarding credible sources of it (the "amateur versus expert" debate). The foundations have been pulled out from under the conventional music business by iTunes. The Tata Nano (a four-door car selling for $2,500) and the $100 laptop look as though they will come to create a profound shift in the automotive and computer businesses. Will social networking sites bring down conventional e-mail? What will the Kindle e-book reader do (if anything) to the book business? Will we see a generation of consumers used to "free" Challengers (free music, free entertainment, free texts, free search, free software, free newspapers, free gaming, free calls) question the whole value and transaction model more broadly in every aspect of their lives? (And could this translate into packaged goods?) What will be the impact of environmental Challengers not just on the way we vacation, but on the whole way we think about packaging and what we really need and don’t need in that packaging?

And all this structural change before, of course, we have really begun to explore the

intimated related future of communications.

A Strategic Model, with some Consistent Principles

While this broad and multifaceted emergence of Challenger diversity has been taking place, our context for it—the context of the marketing, consumer, and brand landscape—has obviously also been changing enormously. In our marketing world, some things are new (social everything), some things are back (product performance), some things are wrongly written off (TV), and some things are trumpeted and then forgotten (mobile). And the socio-digital economy has currencies all its own that we are having to learn, even as they flex and evolve themselves.

While we might disagree on this implication or that implication of the changes around us, one thing is clear to everyone, it seems: Marketing,or rather the transition that marketing is making, is now to be seen as a journey without maps. We know, because influential CMOs have told us, that the old marketing model is broken, and certainly we have all lost confidence in it. What we don’t yet know—because it is in a state of continual emergence and experimentation—is what the nature of the new model is that we are

supposed to replace it with.

So, at one level, a thorough understanding of successful Challengers is ever more interesting and important to us. Even if we yet lack a coherent model, we can at least take some consistent principles with us. And perhaps these principles should be Challenger principles, for in a very real sense this new world will make necessary Challengers of us all.

It is these principles—which we’ll come on to call the Challenger credos—that the book offers for us as a framework as we move forward. A constant way of thinking for us and our team to help us steer our brand into a dynamic and rapidly evolving future.

Changing Criteria

Discussing Challengers in this new world is not without its difficulties, though—it is obviously often hard to be entirely clear who is challenging what. Who and what is Facebook challenging, for example? MySpace? Google? E-mail? Basic human concepts of what it means to be friends? What are we to make of the new brands from India and China—the Tata Nano, for instance (a four-seater car costing $2,500)? It is not going to be sold in Peoria or Paris any time soon, but it will significantly affect the shape and nature of car purchasing and thinking

in emerging markets. And China’s Infosys, Wipro, Lenovo—are they Challengers? Or still, in effect, products and services with logos (to the Western world at least)? What of the new brands to Africa, such as One Laptop per Child (OLPC)? Not yet a threat to Dell’s sales, but it certainly challenges our conceptions of what can be done with technology in poor economies—and it certainly stops and makes me think about exactly what I need from a highly overspecced computer that I am going to buy for my 13-year-old son in London.

So I have modified in one significant way over the past 10 years my definition for Challengers to include in the study. When we researched the book originally, my partners and I wanted to see three to five years of success before writing about any of the brands we considered. Now, if we were to wait and give each brand the five-year test, we’d either be risking many of the more famous ones becoming cliche´s, or perversely ignoring some of the most profound potential shifts any of us as marketers have to consider.

So let us, with our eyes wide open, embrace a slightly different approach in this edition. Let us look at well-established Challengers, for the main part, but accept that we will need to consider some of the more important new contenders before it is yet clear

what their real mid-term trajectory is going to be. And we accept as we go along that there are some much larger challenges posed to the fundamentals of the world around us, and we explore these toward the end of the book.