It's one of marketing's tougher challenges. You're the number-three brand in an established market, with a fairly steady 20% share. The big two play tag for brand leadership, with shares in the high 30s. Some tiddlers and niche brands nibble away at the market edges. You're charged with achieving strong share growth. What are your options?
Strategy one: adopt a 'challenger brand' positioning. This has become the default choice for minority brands since Adam Morgan launched his big idea back in 1999 with the publication of Eating the Big Fish. The aim is to tilt at brand leadership through thought leadership, and Morgan describes 12 'challenger narratives' to help brands in different situations achieve just that.
However, it will take something more substantial than narrative to dramatically shift share in markets where the leaders have a longstanding competence advantage. Imagine you're number three in shaving to Gillette and Wilkinson Sword - a hegemony forged by 100 years of metal-bashing and a willingness to micro-measure hair protrusion with an accuracy that would do justice to particle physics. Even Unilever, with Lynx Razors, and a sizzling challenger narrative, couldn't crack that one.
Strategy two: game-changing innovation. The gospel preached by INSEAD's Kim and Mauborgne. Rather than compete on the normal dimensions of the category, you completely change them instead. The classic example is how Enterprise Rent-A-Car broke the duopoly of Avis and Hertz in the US by locating car-rental depots right in the heart of neighbourhoods, and picking people up from their homes and offices. The high-risk, high-reward option.
Strategy three: segmentation. Let the leaders keep the volume, you take the value. Focus on a demographic or attitudinal segment that will repay your lavish attentions. Think Waitrose vs Sainsbury's and Tesco.
Strategy four: merger. If you've got the sexy brand values, but one of the leaders has a structural advantage, you could broker a deal that keeps you in the driving seat. When Virgin Mobile was acquired by cable giant NTL, it was the Virgin brand that prevailed.
Strategy five: luck. OK, it's not exactly a strategy, but it is a fact of commercial life. It means taking decisive action when something suddenly changes the rules in your favour. Until the early 90s, the suncare category was dominated by tanning brands such as Bergasol and Ambre Solaire. Then the skin cancer publicity took hold and people started to place their desire for a tan on a lower priority level than their desire not to die. Boots' Soltan was swift to use its pharmacy associations to reassure on protection, coming from behind to seize brand leadership, which it still has today.
Of course, you might not be in charge of a number-three brand right now, but we all know a man who is. Nick Clegg is looking to break a 65-year-market duopoly and boost his brand's historic 18%-22% share. Moreover, his market is tougher than most: the first-past-the-post system means that only a massive share hike will translate into meaningful reward.
So that's ruled out segmentation, as he'd had to shoot for the mass. We haven't seen game-changing innovation, but Clegg has pursued a challenger brand positioning with considerable verve, evoking a narrative of difference and departure. He's also taken decisive advantage of his big stroke of luck: to be blessed with the most telegenic presence in the new age of live TV debates. As for some kind of 'merger', well, we'll know soon enough.
Helen Edwards has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand, where she works with some of the world's biggest brands.
30 SECONDS ON ... Number-three brands to watch out for
- The number-three slot can be tough for a brand, but it can also be a springboard. While the leading two brands in any sector tend to focus on each other, the number three is more at liberty to focus on customers, and find ways to serve them better. Here are three number threes that look set to challenge their market leaders.
- Acer: the global number three to Hewlett-Packard and Dell in PCs has pursued a segmentation strategy, focusing on smalland medium-sized enterprises and home users, rather than 'big' businesses.
- Green Flag: self-styled 'breakdown hero'. This brand has been challenging sleepy breakdown-recovery service leaders AA and RAC with an aggressive stance based on lower prices and faster response times.
- Ping Pong: fast-growing Asian-fusion restaurant chain. This number three to Wagamama and Yo! Sushi offers a grazing menu with dim-sum as the star turn, but in a more relaxed, less hurried setting.