LONDON , England ( CNN ) -- When the economy gets tough , the tough come out fighting . For some businesses , that means bringing out a fighter brand -- a cut-price version of a flagship product , marketed under a new name , and intended to fight back against budget competitors . `` Jetstar '' is a fighter brand that worked , beating the competition and creating a lasting , money-making brand . When it 's done right it can destroy cut-price competition , but done badly it can drive a business to the brink of bankruptcy . Mark Ritson , associate professor at Melbourne Business School , has written an article for the October issue of Harvard Business Review discussing the benefits and pitfalls of launching a fighter brand . He says that over the next six months a number of new fighter brands are likely to appear in response to the recession . `` Fighter brands are very unusual but they are becoming increasingly common , '' he told CNN . `` It 's high risk and high reward , and when it works it can have astonishing results . '' Ritson gives the example of Intel , which launched its budget `` Celeron '' chip in the late 1990s to in response to AMD 's low-priced chips , which were threatening Intel 's premium `` Pentium '' brand . Read more business features With `` Celeron , '' Intel came up with a budget alternative to `` Pentium '' for the lower end of the market and cemented its position as market leader . But Intel 's success is the exception rather than the rule . `` The majority of fighter brands not only have n't worked , but have gone on to do significant damage to the companies that launched them , '' said Ritson . General Motors ' ( GM ) `` Saturn , '' United Airlines ' `` Ted , '' and Kodak 's `` Funtime '' film range are all high-profile fighter brands that failed . Despite the appeal of taking on the competition in a fist fight , launching a successful fighter brand is easier said than done . `` The problem is that fighter brands are almost always a knee-jerk reaction to a problem and are not always well thought out , '' Neil Saunders , consulting director with Verdict Research , told CNN . Ritson says one element in building a fighter brand is to avoid creating a low-price product that is so attractive that it steals customers who would otherwise be buying that company 's premium-brand product . On the other hand , if the fighter brand is too expensive or too low quality , it wo n't put up much of a fight against the opposition it 's designed to attack . Another complication is that even the biggest companies do n't have the money and managerial time to distract themselves with a new brand at a time when they should be concentrating on their core products , and then there is the difficulty in operating at an unfamiliar low price level . `` The airline industry is a prime example , where people have launched fighter brands to combat the budget airlines and have been notoriously unsuccessful , '' said Saunders . `` If it 's not your business model it 's not easy to operate , and it 's not usually these airlines ' business model . '' United 's `` Ted , '' and Delta Air Lines `` Song '' were launched to combat budget carriers , but they were n't up to the challenge . In fact , Ritson says those fighter brands contributed to United and Delta 's bankruptcy . But with its budget `` Jetstar '' airline , Qantas managed to find the holy grail for fighter brands -- beating the competition and creating a lasting , money-making brand in its own right . So what was different about the Qantas model ? `` One thing was that Qantas took a long , hard look at the numbers and decided if they could be profitable , '' said Ritson . `` One of the problems with fighter brands is that they are oriented towards destroying a competitor and because of that managers pay a lot less attention to the bottom line . '' He gives the example of GM 's `` Saturn , '' a car designed to take on fuel-efficient , affordable Japanese cars . `` Saturn '' sold plenty of cars , at least at first , but its high operating costs meant it lost millions of dollars , playing a huge part in bankrupting GM . So given the huge risks involved , should companies even consider launching a fighter brand ? `` Only do it if you can win and it fits with your existing proposition , '' says Saunders . Ritson cautions , `` The minute you add a new brand to your portfolio it 's hundreds of thousands of hours of management time , and millions of dollars in development , advertising and distraction . `` Ask the question , 'do I need a fighter brand or is this a real seismic change in the market , which means I need to change my existing strategy with existing brands ? ' Otherwise you will lose five years and $ 50 million . ''
Fighter brands are designed to fight back against low - quality competition . Done wrong , fighter brands can push a company to the verge of bankruptcy . GM 's ` ` Saturn '' is a fighter brand that failed , while Ford 's ` ` Celeron '' succeeded . New fighter brands are likely to be launched in response to the recession .