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It s futile trying to change minds in the marketplace. Xerox lost hundreds of millions of dollars trying to convince the market that Xerox machines that didn t make copies were worth the money. No one would buy its computers. But people still buy its copiers. Coca-Cola blew both prestige and money in an effort to convince the market that it had a better thing than the real thing. No one bought New Coke. But the Classic version sells as well as ever. Tropicana changed its popular straw in the orange packaging, and the marketplace instantly declared that it wanted its orange, not something
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REpositioning
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that looked like a private-label package. The orange is back. When the market makes up its mind about a product, there s no changing that mind. That said, repositioning is not about changing people s minds. It s about adjusting perceptions in their minds. More on this in later chapters.
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Loss of focus is really all about line extension. And no issue in marketing is so controversial. Companies look at their brands from an economic point of view. To gain cost efficiencies and trade acceptance, they are quite willing to turn a highly focused brand, one that stands for a certain type of product or idea, into an unfocused brand that represents two or more types of products or ideas. Look at the issue of line extension from the point of view of the mind. The more variations you attach to the brand, the more the mind loses focus. Gradually, a welldifferentiated brand like Chevrolet comes to mean nothing at all. Scott, the leading brand of toilet tissue, line extended its name into Scotties, Scottkins, and Scott Towels.
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Pretty soon writing Scott on a shopping list meant very little, and Charmin took over the lead. Line extension is not a repositioning strategy, and there is more on this in 6. Some experts will tell you that it s all about building a master brand. Don t listen to them. The result is a confused brand.
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Since about 70 percent of new products are launched with existing brand names, you would think these companies would have some supporting data on the pluses of line extension. The opposite is true. The Journal of Consumer Marketing noted a largescale study of 115 new-product launches across five U.S. and U.K. markets. The study compared the market share gained by products launched under established family or corporate brand names with the market share gained by products launched under new brand names. Share was measured two years after each brand s launch. The brand extension products performed significantly less well than the products launched with new brand names. The Harvard Business Review published a study on line extension. Its observations were that, among other
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REpositioning
CHAPTER TWO
THE RISE OF THE COMPETITION
Every
repositioning pro-
gram has to start with the competition in mind. It s not what you want to do; it s what your competition will let you do. And unless you have a wonderful new invention or you ve stumbled into a monopoly, chances are that you have some killer competitors who are trying to take your business. If you ve been out of touch in recent years, just take a look at the number of choices that are out there.
An Explosion of Competition
What has changed in business in recent decades is the amazing proliferation of product choices in just about every category. It s been estimated that there are a million standard stocking units (SKUs) in the United States.
THE RISE OF THE COMPETITION
An average supermarket has 40,000 SKUs. Now for the stunner: an average family gets 80 to 85 percent of its needs from 150 SKUs. That means there s a good chance that it will ignore 39,850 items in that store. Buying a car in the 1950s meant choosing among models from GM, Ford, Chrysler, or American Motors. Today, you have your pick of cars, still from GM, Ford, and Chrysler, but also from Acura, Aston Martin, Audi, Bentley, BMW, Honda, Hyundai, Infiniti, Isuzu, Jaguar, Jeep, Kia, Land Rover, Lexus, Maserati, Mazda, Mercedes, Mitsubishi, Nissan, Porsche, RollsRoyce, Saab, Saturn, Subaru, Suzuki, Volkswagen, and Volvo. There were 140 motor vehicle models available in the early 1970s. There are more than 300 today. And the choice of tires for these cars is even more vast. It used to be Goodyear, Firestone, General Tire, and Sears. Today, at just one retail outlet called The Tire Rack, you can browse the likes of Avon, B.F. Goodrich, Bridgestone, Continental, Dick Cepek, Dunlop, Firestone, Fuzion, General Tire, Goodyear, Hankook, Hoosier, Kumho, Michelin, Pirelli, Sumitomo, Uniroyal, and Yokohama. The big difference is that what used to be national markets with local companies competing for business have become a single global market with everyone competing for everyone s business everywhere.
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