Spring 2007: by Brent Banda

Growth Through Brand Repositioning

Increased competition, pricing demands and changing markets can affect a company's market share and bottom line. When faced with these situations, companies often turn to repositioning as a way to create new appeal for existing customers and attract new growth opportunities.

Repositioning is the process of identifying and leveraging a company's key competencies in order to redefine its brand to be more competitive.

The extent of a company's repositioning efforts will depend on the degree of change in its customer's taste/ lifestyle/attitudes and the competitive market.

Determine a Strategy
To determine which strategy is most appropriate for a company's situation, it is best to first identify what its key competencies are by answering the following questions:

1. What are the company's strengths?

2. Do these strengths differentiate the company from its competitors? Do they create market-entry barriers for potential competitors?

3. Are these strengths of value to the customer? Are they recognized by the customer as being important?

4. Are these strengths sustainable? Are they specific to the company? Can they be duplicated by competitors?

5. Do these strengths allow the company to offer more value to customers in a cost-efficient manner?

Four Basic Approaches to Repositioning
The extent of a company's repositioning efforts will depend on the degree of change in its customers' taste/lifestyle/attitudes and the competitive market. There are four basic approaches that an organization can take to reposition its brand:

1. Change the image of the product, but keep the product and target market the same.

2. Modify the product to make it more attractive to the current market.

3. Promote the same product to a different customer segment.

4. Alter both the product and target market.

The Cadbury Snack Brand
For instance, since the 1950s, Cadbury Snack was positioned as one of the leading confectionary brands in the United States. However, over the years its consumer loyalty ratings have dropped. Through research, the company identified that consumers perceived the Snack brand as being for an "older/ established customer segment".

Wanting to appeal to a younger target market (ages 25-35), Cadbury refreshed its brand by (1) updating the look of its packaging, displays and marketing communications to portray a more cheerful and lively appearance, and (2) incorporated an advertising campaign that depicted the product being enjoyed in a work environment.

These revisions to Cadbury Snack's brand and target market proved to be successful, as the company increased its customer loyalty rating by 5% in 2005 versus its rating in 2004.

Like Cadbury Snack, it is important to set out realistic goals and steps for what a company is trying to achieve with its new positioning strategy. Had Cadbury Snack launched an athletic food bar instead of repositioning its original product's brand, its existing and potential customers may have become confused with how the product relates to the Cadbury family of products (seen as sweet treats). This could have had a severe impact not only on Cadbury Snack but on other Cadbury products.

Three Steps for Success
Three steps can help a company ensure success when repositioning its product/brand:

1. Determine context for the degree of allowable change. Most customers have a specific definition of what the brand is and what it can be relative to their frame of reference. Repositioning a brand too far from this frame of reference creates customer confusion (rendering the repositioning unsuccessful).

2. Create a bridge for customers to make a logical and emotional connection between their current brand perceptions and the intended one. If an association is made, then it is more likely that customers will extend the same feelings to the repositioned brand.

3. Ensure that the company has the ability to consistently deliver on what is promised.

By properly implementing one of the above strategies, a company should be able to increase sales with existing customers while possibly attracting a new customer base.

> Back to Latest Ideas & Research