 "When the going gets tough")
In the early 1950s, Marlboro had a problem. Famous for selling 'Mild as May' women's cigarettes since 1924, the brand was struggling with low sales because of lung cancer concerns among this audience set. It was a limited success, acquiring around 1 per cent market share. Men liked smoking filtered cigarettes because they perceived them to be safer, but they didn't want to touch a woman's brand. Consider this: even the filter had a printed red band around it to hide lipstick stains.
This is when the forces behind Marlboro decided the time for repositioning the brand had come. The result? The 'Marlboro Man' captured everything Marlboro now wished to stand for: manliness. It worked: Marlboro went on to become a power brand.
Repositioning could just be the right cure for an ailing brand that has stuck to a staid formula. Motives could vary from declining sales, to the current target audience no longer being relevant. In some cases, the product itself could have evolved significantly, competition could have magnified, or customers could find your brand 'outdated' - all reasons that scream for a repositioning exercise.
With that in mind, let's look two brands closer home that have opted for makeovers in some sense. The first is Tata Nano, Tata Motors' 'people's car' launched in 2009. Chairman Emeritus of the Tata group, Nano's creator Ratan Tata recently admitted that positioning the brand Nano as the cheapest car was a big mistake. And he wouldn't be wrong - Nano was supposed to be a revolutionary concept, an engineering marvel and a game changer. It failed to take off despite the Tata brand goodwill. Initial engine mishaps, quality issues, and most of all, a wrong communication plank ensured the brand was written off from the consideration set of even the 'value' buyer.
The brand now wishes to target the youth.
The second brand on our list is Cadbury Gems, the chocolate brand that embodies everything child-like, right from its bright and colourful button-shaped chocolate balls, to its packaging and communication. In 2012, the brand underwent a repositioning - it changed tack to target adults, particularly the tweens and teenagers, telling them they are never too old to love Gems (the 'Raho umarless' campaign).
Eyebrow-raising, considering how much Gems is entrenched in consumer minds as a kid's product. Experts point out this could be a result of stagnating sales or possibly, an attempt to go down the same path as predecessor Dairy Milk, which started targeting adults in the 1990s.
Together, the two brands offer a world of insight into the concept of repositioning. When is it a good time to rethink what your brand stands for? Can pricing have a bearing on the fate of a positioning strategy? And most importantly - are you doing it for the right reasons, and in the right way?
It's all about timing
Going by marketing guru Al Ries, co-founder, Ries & Ries, the best time to change a brand's positioning is when things are going well, and when the brand is gathering momentum. "Unfortunately, too many company executives think the opposite: why change something that is working? They wait until things are going bad before deciding to change a brand's positioning. But that is difficult," says Ries, in an interview with The Strategist.
There's another school of thought, which believes the right time for repositioning is not only when the brand is doing well, but the other extreme - when the brand is in a desperate need for change.
The brand is planning a turnaround exercise with new additions such as power steering, fancy wheel covers, remote keyless entry, twin glove boxes, a music system and a diesel variant to target the youth in a 'smart city car' avatar. "It is imperative that we clearly articulate the value that a brand like Nano brings at a certain price point, as opposed to being cheap because there has been a misconception around the price-tag. The new Nano is aimed at a younger, aspiring consumer class and good value does not mean cheap," says a Tata Motors spokesperson.
Its communication, which released recently, 'Celebrating awesomeness', is proof to this effect - a supposed move from 'cheap' to 'decent'.
"Targeting the youth might be the other extreme… the young, bike zone," says Naresh Gupta, chief strategy officer and managing partner of marketing and branding consultancy, Bang in the Middle. "This is a 360-degree switch and I'm not sure it will work. Frankly, there seems to be confusion on what to do with the product." Also, with diesel prices shooting up, a diesel variant may not be able to save the day, he says.
Clearly, Nano has a lot of work to do. The brand has, in a sense, compromised the prestige value of owning a car (a matter of great pride in India) in the eyes of consumers, say some industry watchers. While it is commendable that Tata Motors has decided to extricate the Nano from its earlier association with "cheap'', it is a matter of debate if targeting the youth - particularly entry-level car owners or bike owners - is the right answer.
Let's understand the category Nano wishes to compete in. The car currently falls in the ultra-low cost or the sub-A segment. So Nano will probably target the A segment (with cars like Alto falling under it). Competing with bikes for attention may be an even tougher job to do, even if it is an affordable upgrade. This would have probably worked better in mature markets like Europe and the US, where bikes are a luxury and an affordable car positioned on the price plank could work well. The concept of commuter bikes, after all, is very South Asian.
"It is easier to change a brand's positioning when it moves from one country to another," agrees Ries, hinting that the Nano probably ought to look beyond India for success now.
Consider these: Beefeater was an inexpensive gin in England, but when the brand was introduced in the US, it became an expensive gin, and a successful one. Corona was a cheap, working-class beer in Mexico. But the importers in the US positioned the brand as an expensive, imported beer. Corona went on to become the largest-selling imported beer in America and one of the top 100 global brands, according to Interbrand.
So clearly, price can be a strong positioning plank in some markets, but ironically, in price-sensitive India, pricing alone can't carry the baton. Coca-Cola, for instance, gave up the Rs 5 price positioning after sometime. "Price can't be a long-term positioning premise in India. Else you land up with a Nano," Gupta adds.
Many liquor brands have been successful though, just by pricing their brands higher than their competitors, like Absolut and Grey Goose. But as branding experts put it, to make this strategy work, your brand needs to be the first to occupy the high-price position.
Generally, brands tend to shut up on the communication front if the product has become more expensive. If it has gotten cheaper, the brand might appear as a 'discounted', bargain one - not always an alluring bet in aspirational categories like cars. So playing with price is like playing with fire - one has to be well equipped to carry the act through.
Are the right reasons at play?
The longevity of a brand's presence matters when it comes to positioning. It is difficult to change the perceptions of brands that have been around for a long time. In the US, Coca-Cola is known as 'The real thing.' Yet the advertising for the past few years has focused on 'Open happiness.' "My belief is that most people consider Cola-Cola to be the real thing and few people identify it with happiness," Ries says. On the other hand, recently launched brands don't have such strong identities, so it is relatively easier to change them.
This brings us to Cadbury Gems, a brand that has been around for decades, symbolising childhood, fun, 'masti' and excitement. Sometime ago, Gems launched its Panda commercial to get kids excited about the brand all over again, and even launched a new packaging in a ball-like shape, called Gems Surprise, which included little Pandas as collectibles. So it came as a surprise when the brand started targeting adults as well with 'Raho umarless' last year. Siddhartha Mukherjee, executive director, chocolate category and media, Cadbury India, says, "Gems has always been a favourite offering among kids. The new communication says that you never really outgrow the fun that this brand can provide."
Fair enough, and the move is reminiscent of Cadbury's strategy to grow the pie and target the adult segment in the 1990s with Dairy Milk. What is perhaps different is that Dairy Milk did it when the whole market was about kids' chocolate, so it was a bold step on its part. The market has changed since, and it maturely divided into chocolates for kids and adults.
"Why should a brand take away the biggest joy a kid has, namely Gems?" Gupta asks. "Even if the brand's sales are stagnating, Gems should probably have refreshed its communication and targeted today's restless kid. But the tweeny-bopper? I don't know." If a brand undergoes an audience shift, it has taken a conscious call that its current strategy is not working for its existing audience. "But in Gems' case, it is a dangerous thing to do, as it is working here! It shouldn't be about widening the target group, it should be about using the right insight for today's child," adds Gupta.
Interestingly, Gems hasn't changed as a product when it talks of including adults. Can repositioning be relevant in such cases, where there may not be something new to say? "It is a misplaced and outdated notion that a brand can't be repositioned if the product offering hasn't been suitably modified," says Manoj Shetty, group creative director, O&M, the agency handling Gems. Brands and consumers have a complex relationship, he explains, and like every relationship, this relationship gets affected involuntarily over time. It is important to acknowledge this change. "What is most important from a brand custodian's point of view, or should be, is to keep the relationship interesting. If that means a repositioning exercise, it means a repositioning exercise," he maintains.
The lessons to be learnt
Nano, in its class, is drawing comparisons with the Volkswagen Beetle, which was originally launched in 1950 as a small, reliable, no-nonsense vehicle for those who wanted a car that was economical to own and run. But price was never mentioned in the advertising. Thanks to the car's iconic shape and the fact that it was enthusiastically adopted by the generation belonging to the 1960s counter-culture in the US, it also became a symbol of 'flower-power', a statement against the excesses of the big, flashy gas-guzzlers of that time. "Thanks to this association, the brand was always perceived as 'cool' rather than cheap," says brand consultant Samit Sinha of The Alchemist. So much so, that when the new variant of the Beetle was launched, it commanded a much higher premium than cars in that segment.
Furthermore, the advertising gave reasons why the Beetle was so inexpensive. For one, it avoided the annual design changes that were standard in the automobile industry. The typical headline of a Volkswagen Beetle ad, read 'The 1970 Volkswagen Beetle will stay ugly longer'. Perhaps there is a lesson in here for brands like Nano.
"Positioning the Nano as a youth vehicle doesn't change its perception as a cheap car. Actually it deepens those perceptions by suggesting that young people can't afford something better," says Ries. "Ratan Tata should do two things. Figure out a positive positioning for its Nano brand and then change the brand name to heighten those positive perceptions," he says.
That said, a repositioning exercise might not even have much to do with a brand at times; the market may have changed, for one. Consider smartphones. BlackBerry with its keypad was once a dominant smartphone brand. But the introduction of the iPhone changed consumer perceptions and everybody wanted a touchscreen smartphone. So BlackBerry introduced a slew of touchscreen smartphones that failed to take off because the perception of the brand (the keypad) was so strong. What BlackBerry could have done, according to analysts, is introduce a touchscreen smartphone with a new brand name.
The lesson: Perhaps a brand shouldn't try to change strongly held perceptions.
And for brands like Nano and Gems, it is currently a wait and watch game.
Interview with co-founder, Ries & Ries
When is the ideal time for a brand to change/tweak its core positioning?
The best time to change a brand's positioning is when things are going well. When the brand is gathering momentum. Unfortunately, too many company executives think the opposite. Why change something that's working? They wait until things are going bad before deciding to change a brand's positioning. But that's difficult. Look at the Nano. The publicity about the brand has not been good. Things are not working, so now we'll try selling Nano to kids.
On the other hand, Coca-Cola was introduced as a medicinal drink. "Ideal brain tonic and sovereign remedy for headache and nervousness," said the initial ads. And sales took off. Then Coca-Cola broadened the appeal by switching to refreshment. "Drink Coca-Cola. Delicious and refreshing."
Gatorade introduced as a "sports drink," focused on football teams and other team sports. After it had become relatively successful, it switched its focus to a "fitness" drink, appealing to many more people. That tends to be a trend. Start a brand very narrow and after it become successful, broaden its appeal.
In the case of the car from Tata Motors, Nano, Ratan Tata was recently quoted saying that positioning of the Nano as the 'cheapest car' was a big mistake. Do you agree? Does such positioning make transition tricky?
I agree with Ratan Tata. You should never position a brand as "cheap." Not that you shouldn't sell inexpensive products. But even an inexpensive product needs a strong positive positioning.
When it was introduced in 1950, the Volkswagen Beetle was the cheapest automobile in the market. But price was never mentioned in the advertising. The focus was on "reliability." Further, the advertising gave reasons why the Beetle was so inexpensive. It avoided the annual design changes that were standard in the automobile industry. Typical headline of a Volkswagen Beetle ad, read "The 1970 Volkswagen Beetle will stay ugly longer." What about the Tata Nano? Positioning the Nano as a youth vehicle doesn't change its perception as a "cheap" car. Actually it deepens those perceptions by suggesting that young people can't afford something better.
Tata should do two things. Figure out a "positive" positioning for its Nano brand. And then change the brand name to heighten those positive perceptions.
Are there examples of brands which have climbed up the ladder by repositioning on the pricing premise?
A category usually starts out at a single price level. Then over time, the category starts to fragment with opportunities at the low end and opportunities at the high end. It's the brands in the middle that tend to suffer.
In America, Walmart focused on the low end and became the world's largest retailer. There have also been successful retail brands at the high-end, including Saks Fifth Avenue, and Tiffany. Sears, once America's largest retailer, is now stuck in the middle of the market. Sales have fallen and the retailer has been losing money.
Many liquor brands have been successful by pricing their brands higher than their competitors. Absolut and Grey Goose vodka, for example. But to make this strategy work, your brand needs to be the first to occupy the high-price position. Absolut was the first high-price vodka brand. Grey Goose was the first 'ultra' high-price vodka brand.
This is when the forces behind Marlboro decided the time for repositioning the brand had come. The result? The 'Marlboro Man' captured everything Marlboro now wished to stand for: manliness. It worked: Marlboro went on to become a power brand.
Repositioning could just be the right cure for an ailing brand that has stuck to a staid formula. Motives could vary from declining sales, to the current target audience no longer being relevant. In some cases, the product itself could have evolved significantly, competition could have magnified, or customers could find your brand 'outdated' - all reasons that scream for a repositioning exercise.
With that in mind, let's look two brands closer home that have opted for makeovers in some sense. The first is Tata Nano, Tata Motors' 'people's car' launched in 2009. Chairman Emeritus of the Tata group, Nano's creator Ratan Tata recently admitted that positioning the brand Nano as the cheapest car was a big mistake. And he wouldn't be wrong - Nano was supposed to be a revolutionary concept, an engineering marvel and a game changer. It failed to take off despite the Tata brand goodwill. Initial engine mishaps, quality issues, and most of all, a wrong communication plank ensured the brand was written off from the consideration set of even the 'value' buyer.
The brand now wishes to target the youth.
The second brand on our list is Cadbury Gems, the chocolate brand that embodies everything child-like, right from its bright and colourful button-shaped chocolate balls, to its packaging and communication. In 2012, the brand underwent a repositioning - it changed tack to target adults, particularly the tweens and teenagers, telling them they are never too old to love Gems (the 'Raho umarless' campaign).
Eyebrow-raising, considering how much Gems is entrenched in consumer minds as a kid's product. Experts point out this could be a result of stagnating sales or possibly, an attempt to go down the same path as predecessor Dairy Milk, which started targeting adults in the 1990s.
Together, the two brands offer a world of insight into the concept of repositioning. When is it a good time to rethink what your brand stands for? Can pricing have a bearing on the fate of a positioning strategy? And most importantly - are you doing it for the right reasons, and in the right way?
It's all about timing
Going by marketing guru Al Ries, co-founder, Ries & Ries, the best time to change a brand's positioning is when things are going well, and when the brand is gathering momentum. "Unfortunately, too many company executives think the opposite: why change something that is working? They wait until things are going bad before deciding to change a brand's positioning. But that is difficult," says Ries, in an interview with The Strategist.
There's another school of thought, which believes the right time for repositioning is not only when the brand is doing well, but the other extreme - when the brand is in a desperate need for change.
The brand is planning a turnaround exercise with new additions such as power steering, fancy wheel covers, remote keyless entry, twin glove boxes, a music system and a diesel variant to target the youth in a 'smart city car' avatar. "It is imperative that we clearly articulate the value that a brand like Nano brings at a certain price point, as opposed to being cheap because there has been a misconception around the price-tag. The new Nano is aimed at a younger, aspiring consumer class and good value does not mean cheap," says a Tata Motors spokesperson.
Its communication, which released recently, 'Celebrating awesomeness', is proof to this effect - a supposed move from 'cheap' to 'decent'.
"Targeting the youth might be the other extreme… the young, bike zone," says Naresh Gupta, chief strategy officer and managing partner of marketing and branding consultancy, Bang in the Middle. "This is a 360-degree switch and I'm not sure it will work. Frankly, there seems to be confusion on what to do with the product." Also, with diesel prices shooting up, a diesel variant may not be able to save the day, he says.
Clearly, Nano has a lot of work to do. The brand has, in a sense, compromised the prestige value of owning a car (a matter of great pride in India) in the eyes of consumers, say some industry watchers. While it is commendable that Tata Motors has decided to extricate the Nano from its earlier association with "cheap'', it is a matter of debate if targeting the youth - particularly entry-level car owners or bike owners - is the right answer.
Let's understand the category Nano wishes to compete in. The car currently falls in the ultra-low cost or the sub-A segment. So Nano will probably target the A segment (with cars like Alto falling under it). Competing with bikes for attention may be an even tougher job to do, even if it is an affordable upgrade. This would have probably worked better in mature markets like Europe and the US, where bikes are a luxury and an affordable car positioned on the price plank could work well. The concept of commuter bikes, after all, is very South Asian.
"It is easier to change a brand's positioning when it moves from one country to another," agrees Ries, hinting that the Nano probably ought to look beyond India for success now.
Consider these: Beefeater was an inexpensive gin in England, but when the brand was introduced in the US, it became an expensive gin, and a successful one. Corona was a cheap, working-class beer in Mexico. But the importers in the US positioned the brand as an expensive, imported beer. Corona went on to become the largest-selling imported beer in America and one of the top 100 global brands, according to Interbrand.
So clearly, price can be a strong positioning plank in some markets, but ironically, in price-sensitive India, pricing alone can't carry the baton. Coca-Cola, for instance, gave up the Rs 5 price positioning after sometime. "Price can't be a long-term positioning premise in India. Else you land up with a Nano," Gupta adds.
Many liquor brands have been successful though, just by pricing their brands higher than their competitors, like Absolut and Grey Goose. But as branding experts put it, to make this strategy work, your brand needs to be the first to occupy the high-price position.
Generally, brands tend to shut up on the communication front if the product has become more expensive. If it has gotten cheaper, the brand might appear as a 'discounted', bargain one - not always an alluring bet in aspirational categories like cars. So playing with price is like playing with fire - one has to be well equipped to carry the act through.
Are the right reasons at play?
The longevity of a brand's presence matters when it comes to positioning. It is difficult to change the perceptions of brands that have been around for a long time. In the US, Coca-Cola is known as 'The real thing.' Yet the advertising for the past few years has focused on 'Open happiness.' "My belief is that most people consider Cola-Cola to be the real thing and few people identify it with happiness," Ries says. On the other hand, recently launched brands don't have such strong identities, so it is relatively easier to change them.
This brings us to Cadbury Gems, a brand that has been around for decades, symbolising childhood, fun, 'masti' and excitement. Sometime ago, Gems launched its Panda commercial to get kids excited about the brand all over again, and even launched a new packaging in a ball-like shape, called Gems Surprise, which included little Pandas as collectibles. So it came as a surprise when the brand started targeting adults as well with 'Raho umarless' last year. Siddhartha Mukherjee, executive director, chocolate category and media, Cadbury India, says, "Gems has always been a favourite offering among kids. The new communication says that you never really outgrow the fun that this brand can provide."
Fair enough, and the move is reminiscent of Cadbury's strategy to grow the pie and target the adult segment in the 1990s with Dairy Milk. What is perhaps different is that Dairy Milk did it when the whole market was about kids' chocolate, so it was a bold step on its part. The market has changed since, and it maturely divided into chocolates for kids and adults.
"Why should a brand take away the biggest joy a kid has, namely Gems?" Gupta asks. "Even if the brand's sales are stagnating, Gems should probably have refreshed its communication and targeted today's restless kid. But the tweeny-bopper? I don't know." If a brand undergoes an audience shift, it has taken a conscious call that its current strategy is not working for its existing audience. "But in Gems' case, it is a dangerous thing to do, as it is working here! It shouldn't be about widening the target group, it should be about using the right insight for today's child," adds Gupta.
Interestingly, Gems hasn't changed as a product when it talks of including adults. Can repositioning be relevant in such cases, where there may not be something new to say? "It is a misplaced and outdated notion that a brand can't be repositioned if the product offering hasn't been suitably modified," says Manoj Shetty, group creative director, O&M, the agency handling Gems. Brands and consumers have a complex relationship, he explains, and like every relationship, this relationship gets affected involuntarily over time. It is important to acknowledge this change. "What is most important from a brand custodian's point of view, or should be, is to keep the relationship interesting. If that means a repositioning exercise, it means a repositioning exercise," he maintains.
The lessons to be learnt
Nano, in its class, is drawing comparisons with the Volkswagen Beetle, which was originally launched in 1950 as a small, reliable, no-nonsense vehicle for those who wanted a car that was economical to own and run. But price was never mentioned in the advertising. Thanks to the car's iconic shape and the fact that it was enthusiastically adopted by the generation belonging to the 1960s counter-culture in the US, it also became a symbol of 'flower-power', a statement against the excesses of the big, flashy gas-guzzlers of that time. "Thanks to this association, the brand was always perceived as 'cool' rather than cheap," says brand consultant Samit Sinha of The Alchemist. So much so, that when the new variant of the Beetle was launched, it commanded a much higher premium than cars in that segment.
Furthermore, the advertising gave reasons why the Beetle was so inexpensive. For one, it avoided the annual design changes that were standard in the automobile industry. The typical headline of a Volkswagen Beetle ad, read 'The 1970 Volkswagen Beetle will stay ugly longer'. Perhaps there is a lesson in here for brands like Nano.
"Positioning the Nano as a youth vehicle doesn't change its perception as a cheap car. Actually it deepens those perceptions by suggesting that young people can't afford something better," says Ries. "Ratan Tata should do two things. Figure out a positive positioning for its Nano brand and then change the brand name to heighten those positive perceptions," he says.
That said, a repositioning exercise might not even have much to do with a brand at times; the market may have changed, for one. Consider smartphones. BlackBerry with its keypad was once a dominant smartphone brand. But the introduction of the iPhone changed consumer perceptions and everybody wanted a touchscreen smartphone. So BlackBerry introduced a slew of touchscreen smartphones that failed to take off because the perception of the brand (the keypad) was so strong. What BlackBerry could have done, according to analysts, is introduce a touchscreen smartphone with a new brand name.
The lesson: Perhaps a brand shouldn't try to change strongly held perceptions.
And for brands like Nano and Gems, it is currently a wait and watch game.
Interview with co-founder, Ries & Ries
When is the ideal time for a brand to change/tweak its core positioning?
The best time to change a brand's positioning is when things are going well. When the brand is gathering momentum. Unfortunately, too many company executives think the opposite. Why change something that's working? They wait until things are going bad before deciding to change a brand's positioning. But that's difficult. Look at the Nano. The publicity about the brand has not been good. Things are not working, so now we'll try selling Nano to kids.
On the other hand, Coca-Cola was introduced as a medicinal drink. "Ideal brain tonic and sovereign remedy for headache and nervousness," said the initial ads. And sales took off. Then Coca-Cola broadened the appeal by switching to refreshment. "Drink Coca-Cola. Delicious and refreshing."
Gatorade introduced as a "sports drink," focused on football teams and other team sports. After it had become relatively successful, it switched its focus to a "fitness" drink, appealing to many more people. That tends to be a trend. Start a brand very narrow and after it become successful, broaden its appeal.
In the case of the car from Tata Motors, Nano, Ratan Tata was recently quoted saying that positioning of the Nano as the 'cheapest car' was a big mistake. Do you agree? Does such positioning make transition tricky?
I agree with Ratan Tata. You should never position a brand as "cheap." Not that you shouldn't sell inexpensive products. But even an inexpensive product needs a strong positive positioning.
When it was introduced in 1950, the Volkswagen Beetle was the cheapest automobile in the market. But price was never mentioned in the advertising. The focus was on "reliability." Further, the advertising gave reasons why the Beetle was so inexpensive. It avoided the annual design changes that were standard in the automobile industry. Typical headline of a Volkswagen Beetle ad, read "The 1970 Volkswagen Beetle will stay ugly longer." What about the Tata Nano? Positioning the Nano as a youth vehicle doesn't change its perception as a "cheap" car. Actually it deepens those perceptions by suggesting that young people can't afford something better.
Tata should do two things. Figure out a "positive" positioning for its Nano brand. And then change the brand name to heighten those positive perceptions.
Are there examples of brands which have climbed up the ladder by repositioning on the pricing premise?
A category usually starts out at a single price level. Then over time, the category starts to fragment with opportunities at the low end and opportunities at the high end. It's the brands in the middle that tend to suffer.
In America, Walmart focused on the low end and became the world's largest retailer. There have also been successful retail brands at the high-end, including Saks Fifth Avenue, and Tiffany. Sears, once America's largest retailer, is now stuck in the middle of the market. Sales have fallen and the retailer has been losing money.
Many liquor brands have been successful by pricing their brands higher than their competitors. Absolut and Grey Goose vodka, for example. But to make this strategy work, your brand needs to be the first to occupy the high-price position. Absolut was the first high-price vodka brand. Grey Goose was the first 'ultra' high-price vodka brand.