Reposition

What is Reposition?

Repositioning in business strategy refers to the process of changing a brand’s market position or the position of a product. This involves altering perceptions in the minds of target consumers relative to competitors. It is a strategic initiative undertaken to revitalize a brand, capture new market segments, or respond to competitive pressures and evolving market dynamics.

This strategic maneuver is often triggered by declining sales, increased competition, shifts in consumer preferences, or a desire to target a new demographic. Successful repositioning requires a deep understanding of the target market, the competitive landscape, and the core value proposition of the brand or product. It is a complex undertaking that impacts all aspects of a business, from marketing and product development to pricing and distribution.

The objective of repositioning is to differentiate the brand from its rivals and to create a more compelling value proposition for the intended audience. This can involve changing the product’s features, price, branding, or advertising. The ultimate goal is to enhance market share, profitability, and long-term brand equity by aligning the offering more effectively with current market needs and perceptions.

Key Takeaways

• Repositioning involves altering how a brand or product is perceived in the market relative to competitors.
• It is typically initiated due to market shifts, competitive pressures, or declining performance.
• Successful repositioning requires significant strategic planning and execution across various business functions.
• The aim is to enhance market share, relevance, and long-term profitability by better meeting consumer needs.

Understanding Reposition

Repositioning is not merely a marketing tweak; it is a fundamental strategic shift. It requires a comprehensive analysis of the current market position, identifying why the existing position is no longer optimal. This might be due to factors like new entrants disrupting the market, technological advancements making existing offerings obsolete, or a changing societal values that render the current brand image unappealing.

A successful repositioning strategy often involves redefining the target audience. A brand that was once aimed at a younger demographic might need to shift its focus to an older one, or vice versa. This redefinition informs changes in product features, messaging, and the channels used to reach consumers. For instance, a luxury brand might reposition itself to be more accessible, or an economy brand might aim for a premium perception.

The execution of a repositioning strategy must be consistent across all touchpoints. Inconsistent messaging or product offerings can confuse consumers and undermine the entire effort. This requires tight coordination between marketing, sales, product development, and customer service teams to ensure that the new positioning is effectively communicated and delivered to the market.

Formula

There is no single, universally applicable mathematical formula for repositioning, as it is a strategic and qualitative process. However, the success of repositioning can be indirectly measured through key performance indicators (KPIs) that reflect changes in market perception and business outcomes. These might include:

• Market Share: Increase in the percentage of the total market that a company’s products or services control.
• Brand Perception Scores: Measured through consumer surveys assessing attributes like quality, value, innovation, and relevance.
• Customer Acquisition Cost (CAC): The cost associated with convincing a consumer to buy a product. A successful repositioning might alter this cost.
• Customer Lifetime Value (CLV): The total revenue a business can expect from a single customer account. Repositioning aims to increase this by attracting more valuable customers or retaining them longer.
• Sales Growth: The increase in revenue generated over a specific period.

Real-World Example

A prominent example of successful repositioning is that of Old Spice. In the early 2000s, Old Spice, once a popular brand, had become associated with an older generation and was losing market share. Its image was perceived as dated and out of touch with younger consumers.

In 2010, Procter & Gamble, the parent company, launched a campaign titled ‘The Man Your Man Could Smell Like’. This campaign used humor, a charismatic actor, and a modern, fast-paced visual style to completely reimagine the brand. The advertising directly addressed women buying products for their male partners, a strategic shift in targeting.

The campaign was a viral sensation, drastically changing the perception of Old Spice from an old-fashioned brand to a modern, desirable, and even humorous one. This repositioning led to a significant increase in sales and a resurgence in popularity among younger demographics, demonstrating the power of strategic image and messaging transformation.

Importance in Business or Economics

Repositioning is crucial for business longevity and growth in dynamic markets. It allows companies to adapt to changing consumer needs and competitive landscapes, preventing market irrelevance and declining revenues. By strategically adjusting their market position, businesses can unlock new revenue streams and strengthen their competitive advantage.

Economically, successful repositioning can lead to increased economic activity through higher sales and potentially the creation of new jobs in marketing, product development, and related fields. It signifies a healthy, adaptive business sector capable of responding to evolving demand and technological progress. Companies that fail to reposition when necessary risk obsolescence, impacting not only their own viability but also contributing to a less dynamic overall market.

Furthermore, repositioning can influence broader market trends. A successful shift by a major player can force competitors to re-evaluate their own strategies, leading to innovation and improved offerings across an industry. This competitive response benefits consumers through greater choice and better value.

Types or Variations

Repositioning can manifest in several ways, broadly categorized by the nature of the change:

• Market Repositioning: This involves shifting the brand’s target audience or the perceived benefits it offers to a different segment of the market. For example, a product initially marketed for professionals might be repositioned for a general consumer audience.
• Competitive Repositioning: This focuses on altering the brand’s standing relative to specific competitors. It might involve highlighting superior features, a lower price point, or a unique value proposition not offered by rivals.
• Brand Image Repositioning: This type of repositioning aims to change the overall perception or image of the brand without necessarily altering the core product or target market significantly. This is often achieved through new branding, advertising campaigns, or corporate social responsibility initiatives.
• Product Repositioning: This involves changing the product itself—its features, quality, packaging, or even its name—to align with a new market perception or target audience.

Related Terms

• Brand Equity
• Market Segmentation
• Competitive Advantage
• Brand Management
• Product Differentiation
• Target Marketing

Sources and Further Reading

• Harvard Business Review: Harvard Business Review
• Investopedia: Repositioning Definition
• Marketing Week: Marketing Week

Quick Reference

Repositioning: Strategic change of a brand’s or product’s market perception relative to competitors, often to attract new customer segments or revitalize existing ones.

Frequently Asked Questions (FAQs)