The Power of Three - challenger brands in the mobile space

De La Soul knew their marketing - 3 really is a magic number! 

As we start to cautiously peer out at what a post-COVID world might look like, we sadly see the demise of many great brands. They either had an inevitable extinction accelerated or were simply unable to evolve fast enough. The result is a reduction in consumer choice resulting in the emergence of more duopolies. 

But, in my opinion, three is the magic number when it comes to oligopolies. It gives the consumer a choice rather than simply ‘an alternative’.

Let me explain.

I shall start with politics. An odd place to start you might think but it is actually the most obvious example of the power of three.

Without 3 main parties we only have Labour or Conservatives and that leads to polarising politics. Without the Lib Dems (or Greens – it doesn’t matter who, just that there is a choice) we only have 2 options and who only wants a 50:50 choice when choosing anything*?

Just look at how Labour rose to power under Tony Blair. They rebranded as New Labour and sat perfectly between the extremes of the right and left. Oddly they became the 3rd option and as a result stole the middle ground where the majority of the electorate sat.

A quick trip across the pond shows how important a 3rd choice would be right now. The USA has been torn in two by polarising positions held by the Democrats and the Republicans. What the US public need is a 3rd choice to sit between the two (ideally in the middle).

This provision of choice is so important to consumers.

Let me bring this back to brands.

Tesco recognised the importance of choice when they introduced their own-brand products. Consumers loved having a cheaper choice to the established brand and then they introduced an even cheaper option - Tesco Value. Tesco had created the perfect platform to introduce a more profitable 3rd pricing option, Tesco Finest. A triumvirate of choice.  

With fewer competitors and more duopolies emerging, I see huge gains to be made by becoming the clear and obvious third choice for customers. Adopting a strategic position of offering consumers a genuine choice, ideally at a cheaper price point due to the fragile economy, is where significant gains can be made. By focusing on being the clear number three brings with it the inevitable consequence of hoovering up the smaller, outlying players too.

But it’s not for the faint hearted. A duopoly exists for a reason, they are the best. Being third requires a brand to benchmark itself against the best and yet clearly differentiate itself from them. Ritson calls it ‘versus’ positioning. They need to become the Tesco Finest of their market - a quality product in its own right, offering better, or at least comparable taste or specs all at a lower price point to differentiate.

Green Flag are the perfect example. AA and RAC have the duopoly, Green Flag want to be the clear 3rd option and do this by offering a bespoke mobile location app and a promise to 'halve your AA/RAC renewal quote'.

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The brands that hit this sweet spot will reap the rewards.

As we start to cautiously peer out at what a post-COVID world might look like, there is going to be an inevitable reduction in consumer choice. I see huge gains to be made by challenger brands becoming the clear and obvious third choice. 

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