SUMMARY: Should You Launch a Fighter Brand?

Today’s economic conditions are harsh on the expensive, high-quality “luxury” brands. With lower-
priced alternatives readily available, companies selling premium products may find themselves losing
customers or slashing prices (and profits). However, many companies are considering a third option
i.e. Launching a fighter brand.

A fighter brand’s job is two-fold. It needs to provide tough competition against low-price rival brands
while protecting the sales of the company’s premium products. A successful fighter campaign may
eliminate the competition and open a new, lower-end market for the company, but the consequences
of a failed fighter brand can ruin its parent company. This article investigates five hazards most likely
to knock out a fighter brand from the inside.

1. Cannibalization

Companies launch fighter brands to attract consumers opting for lower-priced alternatives to their
premium-priced offerings, but what happens when customers are buying a fighter brand instead of the
parent company’s premium brand? In that case consumer thinks that if two products appear close
enough, it’s no surprise that they would choose the cheaper version. Thus, a fighter brand becomes the
very problem it was created to combat.

How to avoid it: The parent company needs to ensure that their fighter brand’s low price is matched
with equally low perceived quality. It must market the fighter brand as a lower-quality product in
comparison to its premium brand, right from the start. Customers need to feel that the higher price of
the premium brand is justified by its higher quality.

2. Failure to Bury the Competition

The most desirable result of a fighter brand is the elimination of the enemy brand. However, the
campaign cannot succeed in this if it’s weighed down by other considerations, like the protection of
the premium brand. For example, the parent company may sacrifice the quality of the fighter brand to
avoid losing premium customers. But if the product itself is clearly inferior even to the rival brand,
consumers would choose the rival brand instead.

How to avoid it: The parent company has to be prepared to react quickly to customer response and
recalibrate the price and performance of the fighter brand to ensure that it doesn’t jeopardize the
premium brand or underperform against the rival brand.

3. Financial losses

The price tag on a fighter brand needs to be competitive enough to keep customers away from rival
brands, yet high enough so the parent company can to make a profit. One way to increase profit is to
cut back on costs — but tread carefully! If a company tries to save on expenses and increase quality
by using standardized parts and production lines, the end product may be indistinguishable from
premium sister brands, resulting in friendly fire.

How to avoid it: Before launching a fighter brand, the parent company needs to crunch the numbers
and make sure it can match the price and value of the rival brand while attaining a sustainable level of
profits. Even if customers respond positively to a fighter brand and it sells well, the campaign has
failed if it isn’t profitable.
4. Missing the Mark with Customers

This hazard may be especially hard for a fighter brand to overcome if only because its creation is in
direct response to what the company has never focused on. If all a fighter brand does is match the
rival, compare to the enemy brand which is perhaps more innovative, more familiar with the low-tier
market, can eventually outstrip the fighter brand.

How to avoid it: The parent company should turn their focus immediately to the new brand’s target
consumers. Determine what potential customers want and develop a brand that would appeal to them.
Performing market-tests can help the parent company figure out what their customers want.

5. Management Distraction

A fighter brand becomes a liability when it distracts the parent company from its core business — the
premium brand. The range of a fighter brand is fairly limited; it is mainly used to fend off low-priced
rivals, but it can do little against other threats. Fighter brands can also leave premium brands more
vulnerable by siphoning away vital funds and management attention and delaying important strategic
decisions.

How to avoid it: The parent company needs to reinvest in the premium brand, making sure that its
high price is justified by its quality. However, the company can’t neglect the fighter brand, either. If a
fighter brand fails, it can drag the premium brand down with it. For both the premium and the fighter
brands to succeed, the management attention allotted to each one must balance out to the benefit of
both