You may be interested to read the Part I before reading this write-up.
Based on realities on the ground, brands like Nokia and Samsung started offering fighting series in their line-up, specifically for the developing world. The latest addition to this fighter series was done (surprisingly) by Apple through its iPhone 5C (targeting entry level users in Europe, Australia and China, and not USA). While it is still unclear how Nokia and Samsung are doing in their fighter brand category, iPhone 5C has already shown its success in the category. Perhaps Nokia was kind of late in adopting this strategy, even not sure whether purely fighter strategy would have saved Nokia from being sold to Microsoft Corporation.
Based on the past cases of fighter brand strategies, it showed that apart from a few success stories, most fighter brands failed to churn out the “cheaper” market segment. Many would argue that, getting a “cheaper” segment’s share is not its prime objective, but to harass the cheaper copycats and protecting the premium brand, that is. Here comes the ultimate danger. If these were the objectives, then fighter brand strategy is a tricky one to design, implement and monitor at the field level.
First danger is the cannibalism (for example, buyers may buy a fighter brand instead of the premium brand of the same company, since the assurance may come in the brand name). The trouble gets worse when companies design a slightly inferior product to avoid cannibalism. Once downgraded, customers may think the value-for-money is better received in comparable copycat brands with “better” specs. So the entire proposition of fighter brand is gone. It not only failed in its prime objective, but also helped customers to functionally judge and choose a competitor’s copycat. iPhone 5C was smarter in this aspect since it targeted only the entry level users who would be buying an iOS smartphone for the first time (no issues of cannibalism!).
Second danger is the misplacement of priorities and resources. While a product development team could be engaged in developing and maintaining a fighter brand by investing time and money through hundreds of man-hours, the same investment could have yielded better results had these been employed for the premium brand. The problem gets worse when it becomes difficult to retract from the fighter brand strategy.
The third danger is the competitors’ ability to reverse engineer and offer “better” specs and feature. Many times, performance differences with premium brand, even though real, may not be perceivable by customers. Even though fighter brands may match the copycats’ offers, the copycats would become dynamic enough to change quickly and offer something “better”. Therefore, rather than cheaper brands being harassed by fighter brands, it gets the other way around- the fighter brands get harassed by cheaper brands!
Does it mean that brands should not think of this fighter brand strategy at all? Not really. It is wise to count on the pitfalls and do an extensive homework along with an exit strategy. It is possible that brand teams can add a success story of a fighter brand amid many failed cases.