Monday, October 29, 2012
PROSITIONING YOUR BRAND FOR GROWTH
When sales have been in a persistent decline a common refrain among marketers is “it’s time to reposition the brand.” Well, it may be too late. In most cases it is too late! Your products lifecycle is on the downslope and is coming to an end, “THE END.”
The Product Lifecycle
Companies, products and brands have lifecycles. There’s a beginning, middle, and an end. The lifecycle for a consumer product is different than one for a pharmaceutical or medical device (i.e., health care). The consumer product lifecycle is, in its simplest form, like a bell curve whereas a pharmaceutical and medical device product has the tail end cut off precipitously. (The red horizontal line is the profit line.) The difference in the ending is a function of: loss of patent protection; introduction of a new, replacement product; introduction of a superior competitive product or technology; lack of support by management; premature milking of the product … among other factors. Unfortunately, many come to an end before their time.
Where in the lifecycle does a company or brand reposition? If you answer, “When it is declining,” you are correct. Repositioning is typically indicative of a brand that is no longer healthy, and typically occurs when it is in a state of (serious) business decline. It’s reactive behavior to (typically alarming or consistent) declines in sales, market share and/or profitability. By the time most companies attempt to reposition a brand, it’s too late. The brand’s strategic health has deteriorated to the point that is difficult to restore, no less resuscitate. Moreover, the profitability is insufficient to sustain a reversal in fortune.
Attempts at repositioning generally lead to failure. Oh sure, there are plenty of examples of successes. Those are the ones we remember. They’re touted in the business press. But for the many repositioning tends to be a case of too little too late. This can be traced to a number of factors among which are weak commitment of management as evidenced by limited support, extremely short time horizons for recovery, reluctance to change the whole product offering and the stubborn hold on the very practices that led to undermining the brand’s health. Additionally, corporations are reluctant to squander whatever potential profits remain in support of what is likely to become a lost cause.
As such, we believe marketers should consider and engage in “prositioning,” a word we have coined that means “proactive positioning.” Prositioning begins while the brand is still healthy. Well before its business begins to decline. The time to engage in prositioning is while the brand is still growing – but its rate of growth has begun to diminish. This provides for proactive management before the brand’s current positioning goes stale (i.e., no longer is as impactful as previously) in the marketplace. The desired impact of prositioning is to move the growth curve in the lifecycle of a product up (that is more growth) and to the right (i.e., extend the lifecycle of the brand).
Consumer Health Care
Among the many dynamics to trigger consideration of prositioning are: changes in customer demographics and/or psychographics; development and availability of new technologies; product improvements; sustainable competitive actions that threaten your brand; new products in the marketplace (especially those that re-segment the category); and new strategic customer insights that could benefit the brand if exploited.
Prositioning affords a brand with many advantages:
1. It stimulates new levels of growth;
2. It serves to extend the lifecycle of the brand further into the future;
3. Prositioning serves to maintain, and even build upon, the brand’s strategic health and its relationships with customers.
4. Successful prositioning can serve to protect the brand against competitive inroads; and, finally
5. It can help in avoiding the anguish, and likely failure, of repositioning.
Examples of Prositioning
There are numerous examples of companies that have been successfully prositioned. Some many years ago Johnson & Johnson transformed itself from a consumer company into a total health care company with their inclusion of pharmaceuticals and medical devices. Charles Schwab grew into more than just a discount broker. PepsiCo acquired Tropicana Products and Quaker to fashion itself into a total beverage company. UPS prositioned itself from a parcel delivery company to a complete logistics provider. Perhaps the most notable example is Apple Inc., which started as a computer company but with the introduction of iPods, iPhones and iPads (from their vast array of offerings) is now a consumer electronics company. Among successful brand prositionings we see the same examples over and over again. Starbucks, Nike, Neutrogena and Tide are examples that spring to mind.
These companies and brands share some common traits:
- There appears to be a vision for the company and/or brand that goes beyond conventional category boundaries.
- Moreover, there’s a willingness to repeatedly question the perception of what business they are engaged in. This can come in the form of how they view what they do (e.g., for Nike it might be make athletic apparel that makes a statement) or what is in it for their customers (e.g., empowerment to “just do it” regardless of athletic proclivities and/or talent) or what company capabilities enable them to provide (e.g., inspiration).
- There is also sensitivity to future developments whether they are related to customer attitudes and behaviors, marketplace dynamics, regulatory issues, technologies - whatever.
- Add to this list of traits openness to new strategies and a willingness to try them out in the marketplace.
- We also believe that insightful and strong “leadership” is another critical trait.
It is important to note, that successful prositioning does not guarantee perpetual success. It requires constant vigilance and responsiveness to company developments, marketplace dynamics, etc. These companies and brands that experienced success as a result of positioning are vulnerable to a reversal of fortunes if they become complacent or, worse yet, rigid in their approach to the market.
Prosition or Else …
The “or else” are consequences we face when we fail to prosition. Specifically, one can expect to encounter declining sales. (After all, what goes up will eventually come down, particularly as markets mature and/or become saturated.) Worse yet, companies and brands are vulnerable to competitive inroads, particularly in the form of disruptive innovation. Consider for a moment the consumer electronics field, more specifically mobile phones and personal computers. In mobile phones, Apple has totally changed the competitive landscape. Just a few short years ago Blackberry and Nokia ruled the roost. They looked down on competition and became complacent. But look at where they are today. It’s doubtful that they will ever regain their leadership positions or, at minimum, become legitimate competitors.
The tablet is impacting PC sales throughout the world. PC makers are experiencing sales declines that cannot be blamed on a weak economy. Instead, tablets have carved out a significant piece of the market, displacing the need for new personal computers.
If we don’t prosition, innovative competitors could certainly retard our growth, and may even obsolete our offering.
Barriers to Prositioning
Yet while the case for positioning is clear (to promote brand health, grow and extend the life of the business, avoid disruption or, at the least, competitive inroads, etc.), it is an alien concept in today’s corporate environment. Certainly prositioning takes a back seat in practice to repositioning. This traces to a number of barriers, all of which are self-inflicted, among which are:
· Focus on the product versus brand (or customer);
- An absence of indicators to provide an early warning regarding the brand’s strategic health and consequently a focus on business results, which lag behind brand health;
- A smug satisfaction with results (i.e., we’re making our numbers) and reluctance to challenge the status quo;
- Limited vision of the future and/or understanding of marketplace dynamics and its potential impact on the brand;
- Resource constraints (i.e., people, time and/or money) and/or the lack of desire to seek-out and test new strategies;
- Resistance to changing the de facto business model;
- Absence of innovation;
- Fear of failure; and
- Organizational issues, particularly politics … among others.
Another barrier to positioning, again self-inflicted, is a company’s lack of understanding about how to go about achieving the new positioning, particularly if it is a stretch from the current positioning. But this can be solved by planning designed to achieve the new positioning in sequential stages over a designated period of time, with each stage being defined by a major initiative such as a product improvement, acquisition, introduction of a new technology, etc. In other words, it can be achieved through engineering its evolution.
Prositioning is not a readily understood or welcomed concept. It requires a change in mindset from being satisfied and/or reactive to being proactive. But its advantages far outweigh its disadvantages. Consider prositioning before you are forced to engage in repositioning to resuscitate your brand’s squandered health.
BOATS & HELICOPTERS:
- Find a way, beyond financials, to assess the brand’s strategic health;
- Formally revisit your brand positioning statement on an annual basis to explore new strategic opportunities (and if you don’t have a brand positioning strategy statement develop one, now);
- During the review question, question, question the conventional wisdom of the organization – the current business model, the business the brand is engaged in, assumptions regarding the marketplace and the advantages of current brand practices;
- Envision and plan for alternate future scenarios that are favorable and unfavorable to your brand;
- Create a plan designed to achieve the new positioning over time through the thoughtful launch of meaningful initiatives that communicate, through action, the intended positioning; and
- Create a dialogue with customers and test alternate strategic directions through specific initiatives, and adapt accordingly.
Be proactive. Prosition your brand for renewed growth.
Richard Czerniawski and Mike Maloney
© 2003 Brand Development Network (BDN) International. All rights reserved.