To create a space for themselves in the market, challenger brands need to differentiate and be disruptive, said Chitranjan Dar, CEO, ITC Foods.
Dar was speaking at the Delhi leg of the exchange4media Conclave 2011, held on July 12.
R Gowthaman, Leader, Mindshare South Asia was the Chairperson for this Session. The Conclave is presented by Jagran Group.
If a challenger brand fails to create disruption, the brand might get a market share, but will fail to get profits, he said.
Challenger Brands can Redefine Categories
While delivering his keynote address on “Challenging the status Quo”, Dar pointed out the advantages a challenger brand has over the leader. According to him, “The challenger brand has the potential to come with something new, and the leader could get hurt more than the challenger.”
He pointed out that while the leader might be the No. 1 in the category, what could go against it was its averseness to change. Also, that leaders are convention driven too could be a banality. However, the fact that they have the backing of a critical mass and that they are a habit in a consumer’s life cannot be ignored.
If the challenger brand has to dislodge the leader from its position, Dar felt that the strategy for the challenger brand should be disruptive driven. “It has to be a David vs. Goliath situation,” he said.
While doing so, challenger brands have the potential to redefine the category. To drive home the point, Dar gave the example of Micromax, which managed to eat into the share of convention driven Nokia. While Nokia had different products for the rural market, for example, a phone with a torch, Micromax had similar features for both the rural and urban audience, while taking specific care of the rural audience. “While, Nokia and others had a phone with a long lasting battery for the rural mass, Micromax had a smartphone and a touch phone for the rural areas, which needed to be charged once in 10 days,” he said.
When Smaller can be Better
Dar pointed out that ITC Foods was able to disrupt the leadership of Parle in the biscuits’ category, which was primarily lea by the Glucose segment. “Five years ago, ‘Glucose biscuits’, coming at affordable price points and targeted at the masses commanded almost 55 per cent share of the biscuits’ category,” he said, adding, “Today, cookies and cream biscuits are emerging as the largest segment within the category.”
This, he said, was possible when Sunfeast, an ITC brand, along with other players came up with cookies and cream biscuits in smaller packaging, priced at Rs 5. “A market that led for 95 years, crumbled in two years,” he said, referring to the leadership Parle commanded.
“Cookies, today, are growing at a rate of 30-35 per cent,” he said. However, giving equal credit to Parle, Dar added that Parle was quickly able to get its act right and made headways in the cream and cookies category, “by working to their strength”.
Disruption, but with thought leadership
Similarly, ITC Foods created disruption in the snacks and noodles category too, with disruptive products and equally disruptive communication. “We were taking the world leaders head-on in the snacks category,” he said, adding, “a product experience in an impulse category costs merely Rs 10, hence it was necessary that enough noise was created. While the flavours and the products itself were “funky”, the branding – Mad Angles, Hatke Jhatke, Tedhe Medhe, Bingo, and Yippee – too was equally funky, and the communication was controversial and meaningless, just to grab attention.
While doing so, it is important that the challenger brand “assumes thought leadership” with “constantly doing the new” and “delighting the consumer” while “creating symbols of revaluation”.
A case in point is Yippee noodles, which Dar pointed out was a product based on intense consumer behaviour observation. “Kids love long noodles and urge their mothers to not break the noodles. No vessel has a square base, hence we came with a round cake noodles which needn’t be broken,” he said. Yippee, meanwhile, doesn’t lump on getting cold and is available in red ‘masala’ too, an insight that kids love to have noodles with ketchup.
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