Product Repositioning: Meaning, Reasons and Example


Meaning of Product Repositioning

Product repositioning refers to changing the position of product in minds of target market. It simply involves updating the perception and understanding of prospects with regard to product features. Product positioning defines how customer see product and compare it with competing products. Repositioning, therefore alters the product drastically to make it more suitable and acceptable among current target market. The modifications in product are brought as per the changing market requirements for enabling them to serve more effectively. The needs and demand of customer varies from time to time which every business need to consider for market survival. This makes the repositioning of product must for gaining the interest of large no. of prospect toward it. 

Repositioning strategy first evaluates the established position of product or service to find out what all alterations need to be bring for enhancing its competitiveness. The changes may be either brought in tangible product itself, its selling price or many times the promotional campaigns used by brand for reaching their targets. Repositioning process continuously monitors the product position for tracking out what is working and what all is not working for informing about the future positioning strategies.

Reasons for Product Repositioning

There are various reasons for which brands prefer to go for product repositioning. Some of the important reasons are as discussed below: –

  1. Declining sales: The top reason for product repositioning by brand is when their sales are declining or are unable to grab the attention of target audience. Whenever sales are dropping, it is must for companies to step back and find out what is wrong. The brand may need to refreshed its identity for attracting the audience. Product repositioning done by Marlboro in early 1950s is a perfect example of repositioning taking place due to drop in sales. 
  2. Increased competition: Many times, the brand may lose its competitive advantage over other players in market due to the existence of stiff competition. It will result in lack of brand’s perceived differentiation in people minds compared to its competitors. Therefore, under such scenarios a brand needs to reposition itself for gaining and highlight its competitive advantages. 
  3. Target audience no longer the best target: A brand may go for product repositioning when it finds out that its target audience is no longer the best and most profitable one. A brand named ‘Marlboro’ from year 1920 to early 1950s was focusing and targeting only on women audience. But when they realize that women are not the most profitable one then made a switch and start targeting male audience.  
  4. Faulty existing positioning: The repositioning strategy might be adopted by brand when its existing position is faulty such that it is not able to attract customers. Brand may be over-positioned where its current position is defined narrowly in market thereby restricting its overall growth level. On the other hand, it may be under-positioned such that it is weak for making clients associate their feelings, sentiments, emotions, traits etc. Both of these situations have adverse effects on brand which need to be handled through reposition process. 
  5. Future plans: Future plans of companies plays an effective role in deciding the reposition of their products. These plans are acquisition plans where business plans to acquire or to be acquired by someone else, threat aversion plan where brand is expecting some major threats in future and need to handle them, and opportunity capitalization plan under which such opportunity are identified by brand which can be most profitable in future.   
  6. Changes in macro environment: Macro environment comprises of those factors which are uncontrollable by business organizations but influence their workings to a great extent. Such factors are changes in economic condition, technology advancement, variations in government policies, changes at industry level etc. All these variations which are not in hand of brand forces it to reposition itself in market. 
  7. Failed extensions: Companies may sometimes address failure while going for brand extensions where established brand name is used for newer product or their category. The present image of brand gets negatively influenced due to the occurrence of brand extensions failure. Therefore, brand for changing their perception in people’s mind need to reposition themselves. 
  8. Evolved products: Companies over the time bring in new products, refine their old product, expand the business and so on. They offer additional range of benefits to wider audience by doing huge investments in substantial product improvement. The branding strategy with which the business started itself may no longer be effective over a long stretch of time period as brand change and adds various offerings.  
  9. Changes in strategic direction: Whenever a company decides to bring significant changes in its strategic direction, the brand repositioning needs to be considered. Suppose a brand is product based but now it is thinking to go into consultancy services, so all such types of big changes require brand to reposition itself. 

Example of Product repositioning

A well-known brand ‘Mc Donald’ in its early days of launch position itself as a low cost and family-friendly restaurant. There was no digital innovation available with company till early 2010s. A single one-size-fits-all approach was applied across all of its outlets. A lot of criticism was received by brand because of menu which had a bad impact on body. In addition to this, brand was also having bad relations with its employees. 

Brand become less trustworthy and customers were shifting to other alternatives in market. Then MC Donald come up with a reposition strategy which went in following way: –  

  • An image of modern and progressive burger company was used by MC Donald for repositioning itself. It also changed its philosophy to ‘billons heard’ from ‘billions served’.
  • For enhancing the digital customer experience a mobile application was launched. 
  • A program was unveiled called ‘Create you own taste’ under which customers can make their own burgers using digital kiosks which were included by brand within its stores under the reposition strategy. 
  • In order to target the ‘younger audience’, all this was supported with an aggressive marketing. 

In the late 2010s, company executed another repositioning strategy under which a completely new format for McDonald’s franchises was launched. It is stripped down version of McDonald’s dedicated to takeout orders which is also termed as ‘to-go’ location. This format is composed fully of touch screen which facilitates customer to place their order and do not exclude tables or chairs. Whole ordering is done via digital mode which enable employees focus more on their orders resulting in faster processing.