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Product Repositioning: Useful notes on Product Repositioning!
An effective positioning ties a company’s product to a segment. The product is suitable for the customers of the target market but is singularly unsuitable for customers of other segments.
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Unless there is lack of effective competition, a strongly positioned product would appeal only to a limited number of customers because it will have the benefits that the target market requires in an exaggerated form, while other benefits would hardly be provided.
So customers desiring benefits other than what the target market requires will not value the product. In an ideal situation, there would be a plethora of strongly positioned products, each serving a small set of customers.
Most companies want large number of customers for their products. To become attractive to a larger segment or multiple segments, the company provides an average level of all the benefits that the customers of the large segment or multiple segments desire from the product.
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This average product is not particularly suitable for any set of customers, but it is also not very unsuitable for most of the customers. In the absence of a product which will fit in with their requirements better, disparate sets of customers buy the product.
By diluting its positioning, the company has been able to sell to larger number of customers. But a more narrowly positioned company can come and attract sets of customers who find its product more suitable than the average product. More of such focused companies will come, eating into the market of the average product.
It is enticing to be able to serve a large or multiple segments with one product. But it turns into a dangerous strategy when other companies are willing to serve very small segments.
When such focused companies spawn the market, the average product which was supposed to mean something to every customer will not mean anything to any customer. It is wise to be, and remain focused.
Repositioning:
Repositioning involves changing target markets or the differential advantage or both. There are four generic repositioning strategies.
Same product and target market, change in the image of the product:
The product may be acceptable in functional terms but fails because it lacks the required image. The communication emanating from the company is overhauled.
The advertising message is changed. The contexts and the structure of the contexts in which the customers come into contact with the company are changed to reflect the new image.
It is not easy to effect such a repositioning. Because the company and its products do not change in any substantive way, it is very difficult for the company to believe that it is different from what it was earlier. And unless the company does not truly believe in its new image, it cannot communicate the new image effectively to its customers.
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A company should engage in intensive internal communication to make its people feel differently about themselves before they start projecting the new image to the customers. Often a company may make superficial external changes, such as in packaging, to convey this type of repositioning to its internal and external customers. They do not work.
Product repositioning:
The product is modified to make it more acceptable to its present target market. Customer requirements may have changed and the product has to be modified to be able to serve the new needs effectively.
The company may have acquired new resources and competencies enabling it to modify the product so that it serves the target market better.
Intangible repositioning:
The company targets different market segments with the same product. The company is able to locate a segment which has requirements, similar to the requirements of the segments it is serving. The company retains its value proposition and offers it to new segments.
Tangible repositioning:
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Both product and target market are changed. A company may decide to move up or down a market by introducing a new range of products to meet the needs of the new target customers.
