129 Reading: Repositioning
When It’s Time to Change Direction
After they are initially introduced to the market, products, services, and brands are constantly being repositioned as a result of changes in competitive and market situations. Repositioning involves changing the market’s perceptions of an offering so that it can compete more effectively in its present market or in other target segments.
Generally it is good to consider repositioning when you see the need or opportunity to improve demand for the offering. Perhaps sales have slowed down, your target segment is getting smaller, or you’ve developed a new innovation you’d like to introduce to the product. Specific factors that can trigger the decision to reposition a product, service, or brand include the following:
- Competition: New competitors entering or leaving the market; competitors joining forces; a competitor’s innovation that threatens to make your offering obsolete; competitive pricing strategies
- Market environment: Economic slow-down or recovery; changes in consumer confidence, the political climate, or social forces like the movement around social responsibility and sustainability
- Consumer trends: Changing tastes and preferences; evolving attitudes and behaviors such as how consumers use technology to learn about, acquire, or interact with your offering; new segments emerging as targets for your offering
- Internal environment: Changes in organizational leadership and strategy; acquisition or development of new technology; introduction of innovation that offers new competitive advantages and differentiators
The tax preparation service H&R Block provides a useful example. As technology-savvy millennials (people born between 1980 and 2000) began entering the workforce and caring about taxes, H&R Block saw that this sizable young segment overwhelmingly preferred TurboTax and other technology-based, do-it-yourself tools, rather than hiring tax professionals like H&R Block. Even after introducing its own online tax preparation tools, H&R was not able to capture this market segment. With its competitive advantage undermined by technology and its established customer base getting older, H&R Block knew that if it wanted to survive, it had to figure out how to appeal to younger taxpayers.
In 2012 and 2014, the company invested in repositioning campaigns to alter the company’s image and appeal to millennials. The campaigns combined satirical humor, social media, and social responsibility (in the form of charitable donations) to get millennials’ attention and create buzz around the H&R Block brand.[1] The following H&R Block video ad from the 2012 “Stache Act” campaign makes the case for a fictional Million Mustache March on Washington to alter the tax code to include a $250 deduction for facial hair grooming materials:
You can view the transcript for “Stache Act Campaign Ad – The Oval Office”. (opens in new window)
The Repositioning Process
The repositioning process is very similar