“When major brands face a situation where low-cost competitors are stealing share, many smart companies don’t try to fight low-cost competition head on; instead they develop a second brand—a ‘fighter brand.’ This allows the original brand to retain its customer base and its premium price.”
This was the premise of Tim Williams as he describes a common but rarely mentioned strategy that employs ‘stealth brands.’ Reading it again though, I think it can also be a warning sign that price isn’t always the advantage of smaller vendors.
Competition is tough enough already when big-name companies like Oracle, SAP, and Microsoft stay at the top of their game. It’s easy to believe that making your offer smaller and less expensive seems like the only way you can strike a blow to these tech giants.
But when you throw in stealth brands into the game, that advantage is lost because it clearly shows that the giants can compete with their own small-sized offerings. Can you still compete?
The answer is yes. You may have lost the price advantage but that doesn’t necessarily mean your competition has gained much (not to mention, there is another price that larger brands must pay to go stealth).
- Affiliation – As attested by Williams, stealth brands still need a level of authenticity and independence from the mainstream brand. Otherwise, it wouldn’t be stealth (even with the price advantage).
- Quality – Just think of the ‘stealth brand’ as another competitor. They’re offering a lower price but what will that mean for their quality? Like all the others, you should see if their products can actually rival yours and aren’t just purely depending on branding power.
- Experience – Smaller businesses end up targeting smaller markets that are overlooked from the perspectives of larger corporations. As a result, you may have more experience with these smaller markets compared to ‘stealth brands’ that were just built up in response to them.
- Independence – Finally, whereas a ‘stealth brand’ may not be truly independent, you are truly the captain of your own ship as it were. You don’t answer to a larger enterprise because the only enterprise you’re marketing is your own.
It’s like you’re a clan of ninjas or spies and you’re sneaking about where the big players aren’t looking. They secretly send those who try to sneak around as much as you but that don’t necessarily mean they can do it better. Price isn’t the only advantage you have!