When evaluating how competitors are doing their own market strategy and seeing if this is a space you can come in to become a competitor, you should look at the differences within the competition. One way to do that is by looking at the “Top Dog” and the “Underdog” in that space
Most Top Dog companies have plenty of budgets to use for any testing with new campaigns, they also have a pretty budget to use celebrities and making their marketing standout. One way that the Top Dog companies try to prevent newcomers in the market space is by having the customer think “you get what you pay for” or they use their brand loyalty to stomp out the competition (Kardes, F. Consumer Behavior, 2e. [MBS Direct]). They try to make it seem like you will always get better value if you stick with the company you know best, which in this case would be the Top Dog. By using confirmation bias, they are able to gain better spots in the grocery store, or customers knowing that this is the only brand they will use because of values. So long as its X brand, it doesn’t matter what you buy from them, because you trust that brand.
When an underdog comes into play, they might not have the same budget as the Top Dogs. Most of the time they are just looking at ways to penetrate the market without there being too large of an investment. The way to do this is to come off as the disrupter in the space they are competing in. A lot of underdogs will do blind comparison tests to show that their product is actually better than the larger competitor (Kardes, F. Consumer Behavior, 2e. [MBS Direct]). Pricing the item lower may not always help, so in having the customer try out the differences will gain the attraction of a new buyer and have them switch.
Some of the best campaigns for underdogs would be to make your product relatable, pick the target market that works best and most likely you will not have to create something flashy because you are using someone that is an everyday person (Jamie Gutfreund (2015)). With that, another campaign is using influencers, someone that your demographic is watching or paying attention to, this applies to the word of mouth which for instance Millenials prefer when it comes to purchasing something (What is DEMOGRAPHY? (2016)). This could become a viral product, therefore, overshadowing the top dog. Another great option is within disrupting the market space, beer doesn’t have to come from just two places. With Craft beer it went from a hobby to a great trend, therefore overshadowing the large breweries. They made something that was relatable to their demographic showed it was something that sparked from creativity and wanted to share with others in a community space.
For myself it depends on what I am purchasing whether or not I would go for an underdog or the top dog. In most foods, if I am willing to try it, I would go for the one that tastes the best for the least amount of money therefore sometimes going for the underdog. In vehicles, I know what I grew up with, a Ford SUV, it will take a lot of work to gain my trust with another type of vehicle because I know what it takes to fix my ford and I have trusted mechanics for when things go wrong. I fall just barely under the Millenial demographic, we go by what is cost-effective, and what company shares my values. Sometimes the Top Dog would be a large corporation which in recent times and politics, are not in peoples favor therefore picking the Underdog (Jamie Gutfreund (2015)). Older generations I think would stick with what they know and trust, resulting in mostly the Top Dog companies. I do believe that the underdog vs the top dog battle will always be different depending on the demographic (What is DEMOGRAPHY? (2016)).
Kardes, F. Consumer Behavior, 2e. [MBS Direct]. Retrieved from https://mbsdirect.vitalsource.com/#/books/9781305161689/
What is DEMOGRAPHY? (2016, July 23). Retrieved April 15, 2019, from https://youtu.be/OGAtL7u8xfA
Jamie Gutfreund (2015, August 25). Retrieved April 15, 2019, from https://youtu.be/ZN8akfgKXNY