Being the major player in a sector is no longer a guarantee of long-term success. It’s not always new entrants to the market that brands should be wary of, however.
Being the second-placed brand in any given category often gives businesses room to experiment and innovate in a way that might be difficult for the market leader.
And although they are of course growing from a smaller base, it is the challenger in terms of market share – brands such as Adidas, Burger King and DHL – that are growing at the fastest rate, according to Kantar Millward Brown’s latest BrandZ ranking.
While the market leaders sometimes feel the pressure of being the one to beat, these faster growing second-placed brands enjoy the freedom to exploit any gaps they see in the market.
Here Marketing Week profiles six of the fastest growing brands of 2017 – Burger King, Adidas, Samsung, Corona, DHL and one to watch Tim Hortons – looking at the steps they have taken to accelerate their growth and what threat they might pose to their competitors as a result.
While the war of the fast food giants rages on, it was Burger King that grew at a faster rate in 2017 compared to rival McDonald’s.
While in pure value terms McDonald’s wins the battle hands down, having increased its brand value by 10% to $97.7bn (£74.5bn), the BrandZ data shows Burger King grew its brand by almost four times as much (39%) to $5.1bn (£3.9bn).
Burger King was also named Cannes Lions Creative Marketer of the Year 2017 in recognition of the its reputation for creating “bold, courageous and innovative” marketing campaigns.
Vice-president of marketing at Burger King UK, Renato Rossi, says there are three reasons why the fast food chain has been able to grow its brand – a strengthening of its brand positioning, commitment to offering convenient on-demand experiences and the ability to grow its physical footprint.
“We are so much smaller than our main competitor, so we are under penetrated, especially outside the US, and therefore have much bigger room to grow,” says Rossi.
Being a smaller player with a lower budget encourages Burger King to take risks in order to create campaigns that get on consumers’ radars, he explains.
We are so much smaller than our main competitor, so we are under penetrated, especially outside the US, and therefore have much bigger room to grow.
“We don’t have the same budget to invest as our competitors, so every day it’s about making sure that every campaign is aligned to the brand positioning and has the potential to be noticed,” he adds.
A standout is the 2016 Cannes Grand Prix award winning McWhopper campaign, where Burger King invited McDonald’s to partner up on a new burger in honour of World Peace Day – an invitation its rival rejected.
Rossi likens the audacity of the McWhopper campaign to Pepsi and Coca-Cola teaming up in the drinks market. He believes McWhopper gained so much attention because it was an idea no one had tried before and revealed more about the fun Burger King personality.
TV still rules the Burger King media mix in terms of reach and relevance, in particular for more promotional focused messages about the value of the product. The visibility offered by outdoor advertising comes second, prized for its ability to drive traffic into Burger King restaurants. Digital channels are chosen to create impact around the brand’s biggest global brand positioning campaigns.
“When we portray our brand personality it all comes via digital channels, which are all globally articulated and we try to generate as much impact as possible. So our big global campaigns are mainly taken care of by digital and PR, and then our promotional messages are delivered through TV and out of home,” Rossi explains.
While Burger King was winning accolades for its marketing, rival McDonald’s found itself in the firing line. In May the fast food giant was slammed for “inappropriately and insensitively using bereavement and grief to sell fast food” after an advert aired in the UK showing a young boy trying to find common ground with his dead father over a Filet-O-Fish.
The fast food giant pulled the advert just four days later, reiterating that the company had no intention of causing any upset and that it would review its creative process to “ensure this situation never occurs again”.
Adidas claimed the coveted top spot in BrandZ’s list of the fastest growing brands of 2017, notching up an enviable 58% surge in brand value to $8.3bn (£6.3bn). US sportswear heavyweight Nike, meanwhile, despite having a significantly higher brand value of $34.2bn (£26.1bn), suffered a 9% fall in growth over the same period.
The ranking reflects a 16% surge in Adidas’ sales during the three months to the end of March, combined with a 30% increase in net profits to €455m (£385m).
The German sportswear giant credited a major marketing push for helping the brand sink its teeth into the North American market, where Adidas enjoyed a 31% increase in sales during the three months to the end of March. During the same period Nike was only able to notch up 3% sales growth.
This trend was mirrored in Greater China where Adidas saw sales surge 31%, double the 15% growth posted by Nike. Off the back of this performance, Adidas expects sales in 2017 to increase 12-13%, fuelled by double-digit growth in Western Europe, the US and Greater China.
The sports brand’s digital-first marketing strategy appears to be paying off, with Adidas notching up 53% growth in online sales during the three months to March. Speaking in September 2016, Adidas global head of digital ecosystem design, David Greenfield, stated that digital would be key to winning dominance in…