Thinking like a challenger helps create new consumer value

When managing brand value perceptions, marketers often focus on innovation or enhancements to provide consumers with more benefits. But faced with constraints and lacking new offerings, many resort to using price as a shortcut to drive volume amid competition.

Instead of heading towards “equity-eroding” pricing, “equity-building” options that don’t rely on tangible product changes can be explored. A challenger mindset is key to this approach, but before we get to that, it’s important to consider the marketing context of the term “value”.

At its core, marketing aims to create business value through revenue growth and profitability. Driving value perceptions should extend beyond promotional tactics to delivering a proposition with both tangible and intangible elements.

The framework below shows that a marketer’s role goes beyond the promotional P in the 4Ps (product, price, place and promotion). Marketers must step up, contribute to the total value proposition and bring strategic, conceptual and commercial thinking to the table.

Value is not just about price

One of the biggest misconceptions in marketing is the equation of value with price. If a brand has strong equity, value should never be reduced to affordability alone.

Many brands fall into price-driven traps, which can weaken long-term positioning.  Overpromotion and discounting may result in quick revenue wins, but at the expense of brand perception. Shrinkflation erodes trust by reducing product sizes while keeping prices unchanged. And opaque price increases fail to justify pricing changes, damaging credibility.

Instead of short-term fixes, strong brands shape value perceptions in ways that create pricing power and long-term resilience.

To fulfil its role in delivering revenue growth and increased profitability, marketing must create sustainable demand. Kantar modelling tells us that brands with higher equity — those offering meaningful differentiation — tend to be less sensitive to price changes.

As Heineken CEO Dolf van den Brink puts it: “Brand power today is pricing power tomorrow.” (Marketing Week, July 31 2023)

How the challenger mindset creates new consumer value

Many brands get stuck in a one-upmanship cycle, competing on marginal product improvements or in price wars. Challenger brands break this cycle by redefining how value is created, as outlined below.

1. Embrace intelligent naivety

A key aspect of the challenger mindset is asking upstream questions about why the category behaves or delivers as it does. This pushes marketers to define the problem clearly and specify the core business they should be in. It frees them to explore all possibilities for the category, allowing them to break with the past and bring about new progress. For example, Netflix founder Reed Hastings asked: “Why can’t entertainment be like a gym membership?” This led to the on-demand fixed-fee model, eliminating the complexity of individual rentals.

2. Pick a fight with the right problem

By clearly defining what we want to challenge we can focus on expediting change. It could be a dimension or a quality of the competition, a fundamental driver of the category, the broader culture surrounding it or something else entirely.

Our goal should be to remove obstacles to progress, making things better for consumers. For example, Virgin Atlantic took on British Airways by redefining the flying experience. Instead of competing on routes or fleet size, Richard Branson introduced glamour, better service and passenger experience, making legacy airlines look outdated.

3. See constraints as opportunities

Instead of viewing constraints as barriers, challengers use them to spark creativity. Asking more propelling questions opens the door to more “We can, if ...” answers. For example, how do we scale research into Alzheimer’s without costly face-to-face consultations? We can if we turn it into a game. The results: Sea Hero Quest — a multi-award-winning citizen science project with a world-leading normative benchmark of 4.3-million people to assess against Alzheimer’s research — delivered new value by finding a way to scale the reach of its research endeavours affordably. Alzheimer’s Research UK – Sea Hero Quest

4. Sacrifice and overcommit

Focusing on fewer, larger and more important things creates new value; but the biggest mistake is that we say we’re going to focus and then we don’t subtract. If we truly understand our consumers, we will know what really counts and we’ll stop doing the things that don’t matter, irrespective of how ego-fulfilling they might be. CitizenM hotels reimagined budget travel. By studying their customers (who “take the train but drink champagne”), they stripped out nonessentials such as lobby bars and unnecessary furniture, and overdelivered on comfort, technology and design.

5. Anchor value in core beliefs

A marketers perspective as a challenger should focus on change that drives progress for the category, making it compelling because it is meaningful and “relatively different”. This point of view also needs to be projected to the world while how it is pursued through one of four agendas: the convenience agenda (access, ease and speed of use), the  product agenda (performance, sensory engagement and design aesthetic), the participative agenda (community, interactivity, personalisation and customisation) and the social and ethical agenda (the planet and society).

For example, Tony’s Chocolonely is a brand on a mission to end exploitation in cocoa (forced labour, child labour and deforestation) and the unfair distribution of value and power in the chocolate industry worldwide. Its chocolate bar is unequally divided to stand for this belief and it has built its entire business around it with a roadmap, sourcing principles and an invitation for broad participation to drive change. Tony’s Chocolonely created new value by making ethics an important decision-making criterion in the category.

Creating value should involve more than pricing. It’s about shifting consumer decision-making toward what truly matters — something consumers may not yet realise they need. By applying the challenger mindset, brands can rethink value, craft compelling promises and deliver on them in ways that connect with their audiences. There’s a world of opportunity for marketers who challenge the norm, redefine value and create lasting brand impact.

David Blyth is the CEO and Founder of Delta Victor Bravo (representing eatbigfish in Africa).

The big take-out: There’s a world of opportunity for marketers who challenge the norm, redefine value and create lasting brand impact.