Repositioning
Navigating market dynamics
Description
Positioning is about setting your brand apart in customers' minds, creating associations that make them think of you when considering a product or service. It's the outcome of your market communication. Repositioning adjusts these perceptions to keep your marketing effective.
In today's fast-paced technological landscape, repositioning is crucial for staying relevant. It helps businesses stay on top amidst new competitors, technologies, and market shifts. Constant repositioning is necessary; without it, your business risks stagnation and loss to more agile competitors. As competition intensifies globally, repositioning becomes essential, especially when markets shrink and you must capture business from rivals to survive.
Table of contents
01Basics of positioning - understanding its mechanism
Positioning, along with its counterpart repositioning, is effective due to the inherent and genetically ingrained manner in which humans process thoughts. This phenomenon is a direct consequence of five fundamental truths about the operation of the human brain, making positioning a crucial mental tool that facilitates more efficient living and decision-making. It is deeply intertwined with the cognitive functions of the human mind, as evidenced by extensive research that highlights five critical aspects of brain functionality.
Firstly, the human mind is incapable of managing the deluge of information that characterizes modern Western societies, where individuals are inundated with a plethora of electronic communications, printed materials, television advertisements, and an overwhelming variety of advertising messages on a daily basis. This saturation leads to a selective engagement with information, necessitating that ideas be conveyed in the simplest and most visually appealing manner possible to capture attention. Complex concepts are likely to be overlooked in favor of straightforward messages.
Secondly, there exists a universal aversion to confusion within the human psyche, coupled with an innate desire for simplicity. This phenomenon is observable not only in human behavior but also in the reception of technological devices. For instance, the Apple Newton, which combined multiple functionalities, failed to gain traction, whereas the iPhone, with its simplified interface, achieved monumental success. To penetrate the minds of potential customers in today's environment, messages must be distilled to their essence, embodying a single, compelling idea that distinguishes them from competitors.
Thirdly, the pervasive sense of insecurity among consumers often leads them to purchase products based on perceived societal expectations rather than actual needs. This insecurity manifests in various forms, including the fear of financial loss, product inefficacy, physical harm, social embarrassment, and psychological discomfort. Historically, this sense of insecurity has influenced purchasing behaviors, prompting individuals to follow popular trends. Brands must therefore reassure consumers that their choices are aligned with broader societal norms.
02Critical repositioning necessity
In the dynamic landscape of today's business world, it is imperative for companies to continuously reevaluate and adjust their positioning strategies. This necessity is driven by three predominant forces that are unmistakably present in the current marketplace.
The first step in any repositioning initiative must be a thorough analysis of the competitive environment. It is not merely about the actions a company desires to take; it is fundamentally about what the competitive landscape permits. Without a unique innovation or a monopoly, businesses will likely face formidable adversaries who are actively seeking to capture their market share.
The modern industry, regardless of the sector, is witnessing an unprecedented surge in competition. This is a direct consequence of the global market, where products from any corner of the world compete on an equal footing. This trend is expected to persist indefinitely as companies from diverse regions strive to penetrate the most lucrative consumer markets.
This increase in options has even spawned a new industry focused on assisting consumers in making informed choices, offering advisory services to help select from a plethora of available options at the most competitive prices.
While an abundance of choices may seem beneficial in theory, it can also lead to some undesirable consequences. The plethora of options can overwhelm consumers, leading to decision paralysis. Excessive choices elevate expectations and can result in self-blame when the selection does not meet these heightened standards. The paradox of choice suggests that with only a few options, expectations are modest, but with a multitude, consumers anticipate finding the perfect item.
03Repositioning - art and technique
While the concept of repositioning might seem straightforward in theory, the practical execution of such a strategy is fraught with complexity and challenges. There exist four fundamental principles that must be adhered to when endeavoring to reposition a business.
Firstly, repositioning is a time-consuming process as it involves altering the existing perceptions held by people, a task that is inherently slow and arduous. Despite the allure of "new and improved" products, studies have consistently shown that consumers tend to favor incremental enhancements to products they are already familiar with over radical innovations.
Secondly, repositioning necessitates a shift in people's attitudes towards a product or brand. Essentially, this means asking individuals to modify their entire belief system, which is a daunting task for a multitude of reasons. As noted by Richard Petty and John Cacioppo, the structure and nature of belief systems are crucial because they lay the cognitive groundwork for attitudes. Altering an attitude, therefore, likely requires a change in the underlying beliefs, either through modification, elimination, or the introduction of new beliefs. Achieving such a comprehensive change in belief through a brief advertising effort is improbable; it demands time for contemplation and repeated exposure to the new positioning concept. One must begin with the pre-existing notions in people's minds and build upon them to effect change.
To illustrate this point, consider the case of Lotus Development, the creators of the first spreadsheet software, Lotus 1-2-3. Upon its release, Lotus 1-2-3 enjoyed immense popularity, to the extent that Microsoft entered the fray with Excel, coinciding with the launch of Microsoft Windows. As the PC industry evolved towards networked systems and collaborative software, Lotus identified an opportunity and developed one of the first groupware products, Notes. They adeptly repositioned themselves with the statement: "First the spreadsheet. Now groupware." This strategic pivot was met with skepticism and required four years of persistent public relations, advertising, and managerial effort to solidify. The CEO of Lotus even had to dismiss staff members who were resistant to the company's new direction and faced challenges from the board of directors. Ultimately, the repositioning proved successful, culminating in IBM's acquisition of Lotus and Notes for $3.5 billion.
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