Should You Launch a Fighter Brand?

With consumers tightening their belts, many premium brands are losing market share to low-price rivals. Their managers face a classic conundrum: Should they tackle the threat head-on by cutting prices and risk damaging their profits and brand equity? Or should they hold the line and lose customers who might never come back? Faced with those two unpalatable alternatives, companies often turn to a third option: launching a fighter brand. A fighter brand is designed to protect a premium offering by combating, and ideally eliminating, its cheaper competitors. The textbook example is Busch beer, which Anheuser-Busch introduced in 1955 at half the wholesale price of Budweiser. Busch fended off the inexpensive regional beers that were eating into Bud's sales and, even better, opened up a brand-new market segment for the company. Unfortunately, such victories are rare. Too many fighter brands inflict little damage on their targets and instead cause significant collateral losses for the companies that initiate them. What trips them up? Cannibalization of the premium product's sales, failure to create an offering that can compete, unprofitability, inattention to consumer needs, and drains on management's time and resources. With detailed accounts of campaigns lost - and occasionally won - Melbourne Business School's Ritson explains how to avoid those major hazards and launch an offering that wins on all fronts.

• Competitive strategy
• Brand management