Are you dancing the Mephisto Waltz?

In 2012, astronomers discovered a new galaxy which they imaginatively named NGC6240.  This new galaxy had a surprise in store for the scientists, it had two super-massive black holes at its centre: something previously thought impossible.  On studying NGC6240, the astronomers discovered that there was a cost to a galaxy having two black holes at its centre; gradually the massive gravitational forces of the two black holes was pulling them together; eventually they would become one.  This process of convergence was named The Mephisto Waltz.

Professional marketers do not need to look back 400 billion light years to find processes similar to the Mephisto Waltz; they simply need to look at the modern high street.  Similar convergence processes can be seen in market category after market category.  If Marks and Spencer produce a popular design of coat, within weeks (if not days), Debenhams, Next and House of Fraser will have similar products on their rails.  in today’s market, brands watch each other like hawks and react rapidly to changes.

Shortly after the BBC re-launched Top Gear, its main presenter, Jeremy Clarkson was asked why the show no longer reviewed mass market family cars and instead focused on entertaining stunts and high performance supercars?

Clarkson responded that the old version of Top Gear would now be very boring.  The major car manufacturers were in a ‘me too’ environment.  If one of them developed a new car feature, all the others would soon follow suit.  Cars were being designed to match competitor’s product.  Major brands were co-developing car platforms and they were using the same components.  This meant that trying to review mass market cars was limited to focusing on the minute differences between brands.

The car market, like many others has converged as competitors have raced to match each others innovations.

For market leaders, the Mephisto Waltz may be no bad thing.  In fact it can make defending their position easier.  Brands challenging the market leader might be able to copy aspects of a market leader’s product but they may not be able to meet other factors such as production economies of scale, share of voice or size of distribution network.  A competitor who is highly differentiated may be harder to defend against.

Therefore, if you are a small business trying to develop a challenger brand, you are better off developing a strategy to enhance your differences; to put clear water between your brand and that of your competitors.  You need to reverse the Mephisto Waltz.  You need to give consumers different choice criteria and give them options they do not find with brand leaders.

So what are the core principles of challenging a market leaders brand:

  1. Embrace intelligent naivety – Market leaders have often been in a market category for a long time.  They may have become set in their ways and have rigid assumptions how things must be done.  Most challengers are new market entrants who may be able to look outside the market for inspiration and to change the market’s ‘rules’.  The Team GB cycling squad are a prime example of where assumptions are challenged.  Through their marginal gains programme, they continually look to innovate not just the equipment used in the sport but the training methods and preparation of athletes before races.  At the London Olympics, the French complained that the British team’s advancement in bike technology was unfair.  The French had become tied to the assumptions existing within the sport.
  2. Build a Lighthouse Identity – Market leaders are often driven by customer opinion.  They carry out massive amounts of research with customers and develop their products to meet customer needs which they then use to navigate the market. Market challengers identify consumer needs but are not beholdent to them.  Successful challengers often develop their own position which acts as a beacon to draw consumers to the brand
  3. Take leadership of thought – Markets often have two leaders, one which leads in terms of scale and market share and another which leads in terms of thought; a brand which breaks conventions of a brand category.  Take the promotion of the iPod. Apple concentrated on their digital music player as an item which was cool and fun not on the quality of sound produced as was the norm with other music players.
  4. Make consumers re-evaluate the brand category – use symbols to break comfortable or established descriptions.  As part of his healthy school meals campaign, Jamie Oliver was able to show that the UK spent more on prison meals (a threat to society) than it did on school meals (a benefit to society).  He was also able to use the Turkey Twizzler; a product manufactured from meat slurry and fat; as a clear symbol of the poor quality of school food.
  5. Sacrifice and Over-commitment –  A successful challenger brand needs to know its boundaries.  It needs to know what are aspects of the business it is willing to let go and what aspects it must retain at all costs.  It also needs to offer more to potential customers than larger competitors.  The New Zealand vodka brand 42Below wanted its products to be available in New York night clubs.  The vodka market was saturated with over 100 brands and it was beyond 42Below’s resources to buy itself into the market.  So when the winter snows hit New York, they sent out teams to clear the snow from the pavement outside the top nightclubs.  The snow clearing teams were in branded 42Below uniforms.  This enabled the firm to develop a close relationship with night club management and to get their products stocked in bars.
  6. Use PR to enter social culture – Smaller brands do not have the promotional budget to compete with larger market leaders so the use of media through press engagement can be key.  For instance, Ryan Air targets the issuing of three press releases a day.
  7. Be ideas focussed not consumer focused – Challenging major brands is a process of continual momentum.  You need to continually change to stand still in the market.  You need to build a buzz in your brand and be seen as the brand to watch.  To challenge you need to produces a constant stream of ideas to enhance the consumer’s experience of your brand.