Reposition or introduce a new brand?
As noted in the repositioning section, brands/products that are considered for repositioning are typically under-performing products. Because of the significant challenges of successfully repositioning the product (as discussed in challenges of repositioning), firms will also consider viable alternatives to repositioning. One main choices for managing an under-performing product are shown in the following diagram.
In order to successfully determine the most appropriate option for improving the performance of a specific product, the organization needs to identify the core reasons for the product’s weak results. This insight will significantly guide the choice of action. However, the following table provides some general principles about when each option should be used.
| Improvement Option | When this option is used |
|---|---|
| Reposition product | For repositioning to be the best option, there must be three important ingredients present. The first is that the poor performance must be attributable (mainly) to the product’s current positioning. The second is that there needs to be a viable positioning space available for the product to be repositioned towards. And finally, the product must have specific design and features or reasonable brand equity. In other words, the product must have “something going for it”. |
| Improve product | On occasions, products will have weak performance simply because they do not have enough relative advantages, or they are lacking an important product feature, and so on. The simple approach here, which is quite common, is to improve the product in some way. And other than using “new and improved” and some packaging changes, repositioning is usually not required. |
| Launch new product (as a replacement) |
It may be simpler and less costly to develop and launch a new brand/product and withdraw the existing product offering. This option would be the best choice if repositioning would be cost-prohibitive, or the product required a major redesign and improvements, or if the brand equity of the product was quite low, or if a substantial repositioning (that is, a major change in understanding) was required. |
| Withdraw product (no replacement) |
Another option is to simply withdraw the product, without replacing it. This would be suitable if there was no viable repositioning space and the current product was either unprofitable or its poor performance was affecting the brand equity of the firm’s other products. |
| Do nothing; milk product | Alternately, the firm could decide to milk the product. A firm would probably take this view on a minor product (or one that needs a major overhaul). The goal is to make the product as profitable as possible, before eventually withdrawing it. The common approach in this regard would be to eliminate any investment in the product (that is, no product improvements or promotional support), as well as increasing the average price through the removal of any sales and trade promotions. |
| Improve marketing mix | Finally, some modification of the marketing mix could deliver a suitable performance improvement. As we know, the positioning of the product needs to be supported by a consistent marketing mix. The use of inconsistent mix elements will result in a poor communication of positioning in the marketplace. (This topic is discussed further in another section on the marketing study guide.) |
Test Your Knowledge: Improvement Options for Product Performance
- When is repositioning a product the best option?
- a) When the product has no brand equity
- b) When the product’s poor performance is due to its current positioning
- c) When the product is already performing well
- d) When there is no viable positioning space available
- What is a key requirement for repositioning to succeed?
- a) Significant product modifications
- b) Lack of competition
- c) Availability of a viable positioning space
- d) Elimination of existing customers
- When is improving the product the most suitable option?
- a) When the product is already well-differentiated
- b) When the product lacks relative advantages
- c) When the marketing mix is inconsistent
- d) When the product has strong performance
- What is the main focus when improving a product?
- a) Repositioning the brand
- b) Enhancing relative advantages or adding features
- c) Reducing production costs
- d) Targeting new markets
- When is launching a new product the best course of action?
- a) When repositioning would be cost-prohibitive
- b) When the product has strong brand equity
- c) When the product is performing well in its current positioning
- d) When the product requires no redesign
- Why might a company withdraw a product without replacing it?
- a) To improve product equity
- b) If the product’s poor performance affects the brand’s image
- c) To create demand for other products
- d) When there is a viable repositioning space
- What does “milking a product” involve?
- a) Investing heavily in product improvements
- b) Maximizing profitability with minimal investment
- c) Targeting a new market segment
- d) Redesigning the product for higher sales
- When would a company decide to do nothing and milk the product?
- a) When the product is high-performing
- b) When the product is minor or needs a major overhaul
- c) When the company plans a new product launch
- d) When the product requires extensive promotional support
- What is a common approach when milking a product?
- a) Lowering prices and increasing promotions
- b) Eliminating promotional investments and raising prices
- c) Repositioning the product
- d) Expanding the product line
- How does improving the marketing mix help?
- a) It eliminates the need for product improvements
- b) It ensures the positioning is supported by consistent marketing elements
- c) It removes competition from the marketplace
- d) It reduces the cost of repositioning
- Which of the following could lead to poor communication of positioning?
- a) Consistent marketing mix
- b) Inconsistent marketing mix elements
- c) Strong brand equity
- d) Lack of competitors
- When is repositioning unnecessary?
- a) When the product performs well with existing customers
- b) When the product has no positioning space
- c) When competitors dominate the market
- d) When the product is losing profitability
- What should a company consider when choosing between repositioning and a new product launch?
- a) Cost, brand equity, and redesign requirements
- b) Competitor actions only
- c) Consumer preferences alone
- d) Advertising budget
- What is a primary goal of improving the marketing mix?
- a) Creating an entirely new product
- b) Supporting the product’s positioning effectively
- c) Reducing marketing costs
- d) Expanding into international markets
- Why might repositioning fail without changes to the marketing mix?
- a) Competitors may copy the strategy
- b) The new positioning may not align with existing elements
- c) The product may require extensive redesign
- d) Customers always prefer lower prices