Often, a product may require repositioning. This can happen if (a) a competitive entry is positioned next to the brand, creating an adverse effect on its share of the market; (b) consumer preferences change; (c) new customer preference clusters with promising opportunities are discovered; or (d) a mistake is made in the original positioning. Citations from the marketing literature serve to illustrate how repositioning becomes desirable under different circumstances. When A & W went national in 1989 with its cream soda, it failed to clearly articulate the position. As a result, research showed that consumers perceived cream soda as an extension of the root beer family. To correct this, the company repositioned the brand as a separate soda category by emphasizing the vanilla flavor through advertising and packaging. Following the repositioning, cream soda’s sales increased rapidly. Over the years, Coca-Cola’s position has shifted to keep up with the changing mood of the market. In recent years, the theme of Coca-Cola’s advertising has evolved from “Things go better with Coke” to “It’s the real thing” to “Coke is it” to “Can’t beat the feeling” to “Catch the Wave” to “Always new, always real, always you, always Coke.” The current perspective of Coca-Cola’s positioning is to reach a generation of young people and those young at heart. The risks involved in positioning or repositioning a product or service are high. The technique of perceptual mapping may be used gainfully to substantially reduce those risks. Perceptual mapping helps in examining the position of a product relative to competing products. It helps marketing strategists

• Understand how competing products or services are perceived by various consumer groups in terms of strengths and weaknesses.

• Understand the similarities and dissimilarities between competing products and services.

• Understand how to reposition a current product in the perceptual space of consumer segments.

• Position a new product or service in an established marketplace.

• Track the progress of a promotional or marketing campaign on the perceptions of targeted consumer segments. The use of perceptual mapping may be illustrated with reference to the automobile industry. The map helps the marketing strategist in calculating whether a company’s cars are on target. The concentration of dots, which represent competing models, shows how much opposition there is likely to be in a specific territory on the map. Presumably, cars higher up on the graph fetch a higher price than models ranked toward the bottom where the stress is on economy and practicality. After looking at the map, General Motors might find that its Chevrolet division, traditionally geared to entry-level buyers, ought to move down in practicality and more to the right in youthfulness. Another problem for General Motors, which the map so clearly demonstrates, is the close proximity of its Buick and Oldsmobile divisions. This close proximity suggests that the two divisions are waging a marketing war more against each other than against the competition. Basically, there are three ways to reposition a product: among existing users, among new users, and for new uses. The discussion that follows will elaborate on these repositioning alternatives.

Repositioning among Existing Customers Repositioning a product among existing customers can be accomplished by promoting alternative uses for it. To revitalize its stocking business, Du Pont adopted a repositioning strategy by promoting the “fashion smartness” of tinted hose. Efforts were directed toward expanding women’s collections of hosiery by creating a new fashion image for hosiery: hosiery was not simply a neutral accessory; rather, a suitable tint and pattern could complement each garment in a woman’s wardrobe. General Foods Corporation repositioned Jell-O to boost its sales by promoting it as a base for salads. To encourage this usage, the company introduced a variety of vegetable-flavored Jell-Os. A similar strategy was adopted by 3M Company, which introduced a line of colored, patterned, waterproof, invisible, and write-on Scotch tapes for different types of gift wrapping. The purpose of repositioning among current users is to revitalize a product’s life by giving it a new character as something needed not merely as a staple product but as a product able to keep up with new trends and new ideas. Repositioning among users should help the brand in its sales growth as well as increasing its profitability.

Repositioning among New Users Repositioning among new users requires that the product be presented with a different twist to people who have not hitherto been favorably inclined toward it. In so doing, care must be taken to see that, in the process of enticing new customers, current customers are not alienated. Miller’s attempts to win over new customers for Miller High Life beer are noteworthy. Approximately 15 percent of the population consumes 85 percent of all the beer sold in the United States. Miller’s slogan “the champagne of bottled beer” had more appeal for light users than for heavy users. Also, the image projected too much elegance for a product like beer. Miller decided to reposition the product slightly to appeal to a wider range of beer drinkers without weakening its current franchise: “Put another way, the need was to take Miller High Life out of the champagne bucket, but not to put it in the bathtub.” After conducting a variety of studies, Miller came up with a new promotional campaign built around this slogan: “If you’ve got the time, we’ve got the beer.” The campaign proved to be highly successful. Through its new slogan, the brand communicated three things: that it was a quality product worth taking time out for; that it was friendly, low-key, and informal; and that it offered relaxation and reward after the pressures of the workday. At Du Pont, new users of stockings were created by legitimizing the wearing of hosiery among early teenagers and subteenagers. This was achieved by working out a new ad campaign with an emphasis on the merchandising of youthful products and styles to tempt young consumers. Similarly, Jell-O attempted to develop new users among consumers who did not perceive Jell-O as a dessert or salad product. Jell-O was advertised with a new concept a fashion-oriented, weight-control appeal. The addition of new users to a product’s customer base helps enlarge the overall market and thus puts the product on a growth route. Repositioning among new users also helps increase profitability because very few new investments, except for promotional costs, need to be made.

Repositioning for New Users Repositioning for new uses requires searching for latent uses of the product. The case of Arm and Hammer’s baking soda is a classic example of an unexplored use of a product. Today this product is popular as a deodorizer, yet deodorizing was not the use originally conceived for the product. Although new uses for a product can be discovered in a variety of ways, the best way to discover them is to gain insights into the customer’s way of using a product. If it is found that a large number of customers are using the product for a purpose other than the one originally intended, this other use could be developed with whatever modifications are necessary. Repositioning for new uses may be illustrated with reference to Disney World’s efforts to expand its business. In 1991, it opened a Disney Fairy Tale Weddings Department, which puts on more than 200 full-service weddings a year, each costing about $10,000. At Du Pont, new uses for nylon sprang up in varied types of hosiery (stretch stockings and stretch socks), tires, bearings, etc. Its new uses have kept nylon on the growth path: wrap knits in 1945, tire cord in 1948, textured yarns in 1955, carpet yarns in 1959, and so on. Without these new uses, nylon would have hit the saturation level as far back as 196

2. General Foods found that women used powdered gelatin dissolved in liquid to strengthen their fingernails. Working on this clue, General Foods introduced a flavorless Jell-O as a nail-building agent. The new-use strategy is directed toward revamping the sales of a product whose growth, based on its original conceived use, has slowed down. This strategy has the potential to increase sales growth, market share, and profitability.

PRODUCT-OVERLAP STRATEGY The product-overlap strategy refers to a situation where a company decides to compete against its own brand. Many factors lead companies to adopt such a strategic posture. For example, A&P stores alone cannot keep the company’s 42 manufacturing operations working at full capacity. Therefore, A&P decided to distribute many of its products through independent food retailers. A&P’s Eight O’Clock coffee, for example, is sold through 7-Eleven stores. Procter & Gamble has different brands of detergents virtually competing in the same market. Each brand has its own organization for marketing research, product development, merchandising, and promotion. Although sharing the same sales force, each brand behaves aggressively to outdo others in the marketplace. Sears’ large appliance brands are actually manufactured by the Whirlpool Corporation. Thus, Whirlpool’s branded appliances compete against those that it sells to Sears. There are alternative ways in which the product-overlap strategy may be operationalized. Principal among them are having competing lines, doing private labeling, and dealing with original-equipment manufacturers.

Competing Brands In order to gain a larger share of the total market, many companies introduce competing products to the market. When a market is not neatly delineated, a single brand of a product may not be able to make an adequate impact. If a second brand is placed to compete with the first one, overall sales of the two brands should increase substantially, although there will be some cannibalism. In other words, two competing brands provide a more aggressive front against competitors. Often the competing-brands strategy works out to be a short-term phenomenon. When a new version of a product is introduced, the previous version is allowed to continue until the new one has fully established itself. In this way, the competition is prevented from stealing sales during the time that the new product is coming into its own. In 1989, Gillette introduced the Sensor razor, a revolutionary new product that featured flexible blades that adjusted to follow the unique contours of the face. At the same time, its previous razor, Atra, continued to be promoted as before. It is claimed that together the two brands were very effective in the market. It is estimated that 36 percent of Sensor users converted from Atra. If Atra had not been promoted, this figure would have been much more, and Sensor would have been more vulnerable to the Schick Tracer and other rigid Atra look-alikes. Interestingly, however, when Gillette introduced the Mach 3 razor in 1998, it decided to run down stocks of its Sensor and Atra shavers ahead of the new product’s launch. To expand its overall coffee market, Procter & Gamble introduced a more economical form of ground coffee under the Folgers label.

A more efficient milling process that refines coffee into flakes allows hot water to come into contact with more of each coffee particle when brewing, resulting in savings of up to 15 percent per cup. The new product, packaged in 13-, 26-, and 32-ounce cans, yielded the same number of cups of coffee as standard 16-, 32-, and 48-ounce cans, respectively. Both the new and the old formulations were promoted aggressively, competing with each other and, at the same time, providing a strong front against brands belonging to other manufacturers. Reebok International products under the Reebok brand name directly compete with its subsidiary’s brand, Avia. As noted earlier, the competing-brands strategy is useful in the short run only. Ultimately, each brand, Avia and Reebok, should find its special niche in the market. If that does not happen, they will create confusion among customers and sales will be hurt. Alternatively, in the long run, one of the brands may be withdrawn, thereby yielding its position to the other brand. This strategy is a useful device for achieving growth and for increasing market share.

Private Labeling Private labeling refers to manufacturing a product under another company’s brand name. In the case of goods whose intermediaries have significant control of the distribution sector, private labeling, or branding, has become quite common. For large food chains, items produced with their label by an outside manufacturer contribute significantly to sales. Sears, J.C. Penney, and other such companies merchandise many different types of goods textile goods, electronic goods, large appliances, sporting goods, etc. each carrying the company’s brand name. The private-label strategy from the viewpoint of the manufacturer is viable for the following reasons:

• Private labeling represents a large (and usually growing) market segment.

• Economies of scale at each step in the business system (manufacturing capacity, distribution, merchandising, and so on) justify the search for additional volume.

• Supplying private labeling will improve relationships with a powerful organized trade.

• Control over technology and raw materials reduces the risk.

• There is a clear consumer segmentation between branded and unbranded goods that supports providing private labels.

• Private labeling helps eliminate small, local competitors.

• Private labeling offers an opportunity to compete on price against other branded products.

• Private labeling increases share of shelf space a critical factor in motivating impulse purchases. But here are also strong arguments against the private-label strategy:

• Market share growth through private-label supply always happens at the expense of profitability, as price sensitivity rises and margins fall.

• Disclosing cost information to the trade usually essential for a private-label supplier can threaten a firm’s branded products.

• In order to displace existing private-label suppliers, new entrants must undercut current prices, and thus risk starting a price war in an environment where trade loyalty offers little protection.

• In young, growing markets, it is the brand leaders, not the private-label suppliers, that influence whether the market will develop toward branded or commodity goods.

• Private labeling is inconsistent with a leader’s global brand and product strategy it raises questions about quality and standards, dilutes management attention, and affects consumers’ perception of the main branded business.

Many large manufacturers deal in private brands while simultaneously offering their own brands. In this situation, they are competing against themselves. They do so, however, hoping that overall revenues will be higher with the offering of the private brand than without it. Coca-Cola, for example, supplies to A&P stores both its own brand of orange juice, Minute Maid, and the brand it produces with the A&P label. At one time, many companies equated supplying private brands with lowering their brands’ images. But the business swings of the 1980s changed attitudes on this issue. Frigidaire appliances at one time were not offered under a private label. However, in the 1980s Frigidaire began offering them under Montgomery Ward’s name. An interesting question that can be raised about private branding is whether cars can be sold under a distributor’s own label. The idea has surfaced at Auto Nation, the country’s biggest car retailer, who might one day buy a car manufactured in, say, South Korea, and sell it under its own label. A retailer’s interest in selling goods under its own brand name is also motivated by economic considerations. The retailer buys goods with its brand name at low cost, then offers the goods to customers at a slightly lower price than the price of a manufacturer’s brand (also referred to as a national brand). The assumption is that the customer, motivated by the lower price, will buy a private brand, assuming that its quality is on a par with that of the national brand. This assumption is, of course, based on the premise that a reputable retailer will not offer something under its name if it is not high quality. Consider the Save-A-Lot chain, a unit of Minneapolis food distribution Super Valu Inc. whose 85% of sales come from private-label items. With a total of 706 stores in 31 states, with sales amounting to $ 3 billion, it is one of the nation’s fastest growing grocery chains.