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Competitive Perceptual Positioning
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Concept Version 6
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Repositioning

Repositioning involves changing the identity of a product relative to competing products.

Learning Objective

  • Indicate the characteristics and application of a re-positioning as it applies to competitive perceptual positioning


Key Points

    • When a company initiates a re-positioning strategy, it needs to change the expectations of stakeholders, including employees, stockholders, and financial backers.
    • A company may need to consider a re-positioning strategy if they have a weak brand, if they have not remained competitive in the market, or if there is a change in the economy.
    • A company may re-position a specific product line, a brand, or the entire organization.

Term

  • repositioning

    Changing the identity of a product or a company in the minds of stakeholders and competitors.


Full Text

Repositioning involves changing the identity of a product relative to competing products. Many famous companies have saved failing products by repositioning them in the market. When a company initiates a repositioning strategy, it needs to change the expectations of stakeholders, including employees, stockholders, and financial backers.

Apple Inc.

Apple Inc. achieved re-positioning

Brand Identity

Brand identity is often involved with the success or failure of a product. A company that has achieved brand recognition can often survive the challenge of new entrants in a market. The problem with being at the top of the market, however, is that someone is always trying to knock you off. Companies that have become complacent with brand strategies sometimes find themselves knocked off their pedestal by a competitor.

Lack of a Strong Brand

Some companies lack a strong product or brand. They perform well in the market, but not exceptionally. Any changes in the market can force these companies from maintaining business to failing.

Economic Volatility

A severe change in the economy can affect a company or a brand. The hospitality industry saw this when the United States went through a recent financial crisis. Many upscale hotels and restaurants suffered because people couldn't afford the prices.

There are Different Levels of Repositioning

An organization can reposition a product line, a brand, or an entire company. Determining which type of repositioning is needed isn't always easy; it is important to understand the changes in the current market and how competitors will react to the change. If a change is volatile and is unprecedented, there may not be enough information available to use to make a decision. Understanding the strengths and weaknesses of a company can help determine when repositioning may be necessary and how the change should occur. When Apple switched their focus to iPod and its successors, for example, the company was able to change its financial situation and achieve success. The complete dedication of stakeholders and the creation of a product that is in demand can help companies survive a repositioning strategy.

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