Does sizing up mean selling out?
Underdog brands emphasize their determination despite external struggle, and often use the opposition of Big Business to suggest they offer something better and more in tune with consumers. The underdog may be perceived as more approachable, whereby consumers root for it to succeed and view its growth as validation of their investment in the brand.
In some cases, the underdog ethos can be legitimately maintained even as it grows. For example, they can enter new industries or markets as the underdog and upend the staid competitors. However, if an underdog brand begins to appear less daring and innovative, more focused on the bottom line at the expense of the consumer experience, the fervent passion for the brand can diminish quickly.
While the marketplace is full of examples of underdog brands that eventually fought their way to the top (e.g. Apple, Ben & Jerry’s), no studies have assessed consumer perceptions as an underdog gains market share. Underdog brands appear to face a contradiction: Success can potentially undermine their status as an underdog, and perhaps their longer-term viability. As a result, how an underdog brand manages and communicates the transition to larger market acceptance is arguably just as important as why and how they gained initial followers. What are the short-term advantages of an underdog brand position, and how can the brand maintain long-term support as marketplace success renders their underdog status less salient?
There may be individual differences that distinguish consumers who are drawn to underdog brands. A 2011 study by Paharia and colleagues found that underdog support may be stronger for those who self-identify as underdogs or come from cultures that reflect an underdog narrative (e.g., the U.S. “American Dream” narrative). In addition to this, innovativeness, or the inclination to buy new and different products rather than remaining with previous choices, may characterize many underdog supporters. Underdog brand narratives are new and different (and unproven) compared to the existing market leaders, which may make them appealing to consumers that seek innovation.
To assess the implications of an underdog brand strategy, my colleagues and I recently conducted a nationwide study of 382 consumers. We asked them to read either a description of an underdog or a non-underdog brand. The underdog was described as being “small,” “new” and having “smaller marketing and distribution budgets,” while the non-underdog was described as being “well sourced,” having “done well” and having a “large marketing and distribution budget.”
To explore the effect of the competitive environment on the success of an underdog strategy, half of the participants were told that the brand existed in a category dominated by a large competitor. Participants then answered questions about their attitudes towards the brand, level of trust in the brand, purchase intentions and personality characteristics.
Following the initial brand evaluation task, study participants were shown updates that described a situation in which the brand had become the market leader in its category. They were told that the founders had either “partnered with a large, multinational conglomerate” and “relinquished all executive control to the new parent company” or that the founders “still make all executive decisions for the brand.” After reading the update, participants responded to a second set of items pertaining to the brand’s updated status.
An interesting finding in our study was that the positive effects of underdog brand positioning extend beyond immediate consumer behavior (attitudes, purchase intention) to consumer’s actual trust in the brand. Furthermore, we found that the existence of a large, dominant competitor enhanced perceptions of the brand’s underdog status, leading to more favorable outcomes, but that the competitive environment in and of itself was not enough to promote brand trust.
This indicates that brand trust originates from something inherent to the underdog brand itself (e.g. being disadvantaged). As suspected, we confirmed that highly innovative consumers are more likely to trust, have favorable attitudes towards and purchase underdog brands.
Most importantly, our findings demonstrate that underdogs who achieve marketplace success can manage their underdog status through communication with consumers. When the underdog brand was perceived as relinquishing brand control to a parent company, attitudes, trust and purchase intentions suffered. As they gain success, underdog brands should communicate that they have stayed true to their roots, with ties back to their founders if possible.
Even if growth does necessitate new ownership, the underdog narrative can be a useful tool for minimizing perceptions of “selling out.” Successful former underdog brands, such as Ben & Jerry’s, are careful to maintain ties back to their founders and their guiding principles, maintaining their authenticity and the reasons consumers supported them in the first place. It has proven to be a recipe for long-term success.
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Siemens was joined in the research by Danny Weathers, a marketing associate professor at Clemson; Scott Smith, a marketing professor at the University of Central Missouri; and Dan Fisher, a marketing associate professor at the University of Central Arkansas.
