Flanker brands can increase revenue in a stable, mature market
You can grow your sales by competing with yourself.
Competing with your own business does not intuitively make sense. However, if you want to create incremental sales, one method to accomplish this is to introduce another brand of your current product. Most businesses in a mature market do this—for example, MillerCoors has created flanker brands around it’s Miller Lite brand: Miller 64, Keystone Light, and Coors Light. These four brands compete with themselves in their one segment, but it’s still better than a direct competitor taking market share away from you.
Flanker brands are everywhere and you might not even know it. Most consumer products companies use a flanker brand strategy in some of their strategic business units. This strategy is not only for large, fortune 500 companies—even small business can use this strategy. Take for example a beekeeper that has various quality levels of honey. There is nothing wrong with the honey, but the source of the honey makes it either premium or standard quality. The premium quality can be branded using the beekeeper’s premium brand that will command a premium price, and the standard quality can be branded with the beekeeper’s standard brand, which is different from the premium brand. Keeping the brands, and quality levels separate, will maintain brand equity for the premium brand.
A flanker brand strategy is useful to grow your business, or to defend it from lower priced competitors. In the previous example, the beekeeper can have products at two different price points to secure sales from two different customers: a premium customer and a price-sensitive customer. This way, the business owner will capture sales from two different market segments without damaging the premium brand of honey.
Although this strategy is technically competition with one’s own business, it is still better than having a direct competitor taking sales from you. Consider a flanker brand for your business if you want to create incremental sales.
Paul J. Werner is an Michigan State University Extension educator from L’Anse, Michigan. Werner has many years experience in small business ownership and entrepreneurship. He and his wife currently own two small businesses in the Upper Peninsula of Michigan. You can obtain free business counseling by registering with the MSU Product Center.