Repackaging and Repositioning – An Imperative Change?
Posted in Marketing & Strategy Articles, Total Reads: 2774
, Published on 16 December 2012
Little would have CharlesDarwin realized while coming up with the theory of adaptation that the implications of this theory would lead to the modern day economy.
It is considered that it is all about survival of the fittest in this dog-eat-dog world, so is the case with brands. Branding is not just about increasing sales now; it is also about building a relationship with your consumer. Repackaging and re-positioning are thus crucial aspects of branding since they affect the way a consumer perceives the product or service being offered.
Introduction: Branding is not only just a term or symbol that helps identify a product, it involves many other attributes that helps consumers relate to it, form loyalty towards it and if possible see it as the only product that can solve their requirement. The product needs to be redesigned and revamped from time to time as per changing requirements of the industry, the company and the consumer.
A brand is a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."
This is why brands keep re-doing their symbols, product designs etc. If the product is not doing well in a particular segment of the market, they package it in a new look and position it to be a product of a different but mostly related segment. To quote an example, Cadbury’s chocolate Perk was not a major player in the wafer chocolate segment with big players like Kit-Kat and Nestlé’s Munch taking hold of the market share. Then a few years back, Cadbury decided to do away with its Perk brand and repackaged and repositioned it as a glucose chocolate, a segment of the chocolate market that had not yet been explored. Earlier, it didn’t have a very clear consumer base but with the new product they are targeting the young generation who get tired with all the work they are expected to do and need glucose to bring back their lost energy.
Repackaging involves changing the size, shape and design of the product in order to suit the company’s or consumer convenience. Heinz came out with a new design for its ketchup bottle so as to suit the compartments of refrigerators so that the bottle would fit in easily. This decision led to a drastic increase in sales for Heinz. A couple of years back, a popular hair oil brand changed the shape of its hair oil bottle from round and tall to a curvy bottle with the same height. A major soft drink company did the same with some of its soft drink bottles. They made it appear stylish and easier to hold through advertisements. On analysis of the reason for this repackaging we discovered that the intention behind the change in look and feel may have been two fold.
Not only did they increase sales by attracting consumers but their production costs also came down. This is because keeping the height of the bottle constant, if the shape is changed from round to curvy, the curved bottle would hold less volume of the product as compared to the round one.
In this simple physics experiment which probably most people have studied in school, four glass tubes of varying shapes, all having the same height, are connected at the base. Water is poured into the vessel and regardless of the shape; the water level being the same in each container, the volume contained in each vessel differs.
This is because:
Pressure (P) at the base of a vessel= (Rho-liquid density)*(g-acceleration due to gravity)*(h-height of vessel)
h and g being constant;
Pressure P is directly related to volume of the liquid in the vessel.
Using Bernoulli’s equation,
p = pressure of the fluid
γ = ρg = density·acceleration of gravity = specific weight of the fluid.
v = velocity of the fluid
g = acceleration of gravity
z = elevation
p/γ= pressure head
V2/2g = velocity head
Assumptions: the fluid is ideal and incompressible.
We can now find the pressure between two points and infer that since pressure is different in different vessels, the volume of liquid contained by them is also different.
Thus, it can be shown that by selling their products in stylish wave shaped or inward-bulged bottles, the companies selling the product are actually providing lesser quantity of the product.
Here’s a breakdown by percent of revenues that MNC’s spent on advertising in 2006, starting with the most first:
Microsoft – more than 20 percent of their annual revenue or $11.5 billion
Coca-Cola – more than $2.5 billion
Yahoo – more than 20 percent of their annual revenue or $1.3 billion
eBay – 14 percent to 15 percent of its revenue – which was $871 million, much of that to advertise on Google
Google – In millions rather than billions of dollars – with $188 million
Starbucks – $95 million
These brands are all well established and key players of the market. Then why do they spend so much on marketing annually? The reason for this is that they need to keep re-establishing themselves in the market by way of new products and better services in order to stay ahead in the competitive market.
Re-positioning the brand/product is all about introducing it in a new form in order to increase sales, cater to a new customer segment, etc.
Whenever the product goes into the maturity or decline stage, the marketers must bring it back to the introduction or the growth stage. This can be done by using a number of strategies such as product planning or marketing strategies.
Create variations of the product – For example, Apple comes up with new variations of Iphone every now and then. Though each version has new features, all are branded under the same name of IPhone.
Finding new uses of the product –A home printer which was earlier used only for printing purposes now comes with a photocopier as well as a scanner.
The marketing strategies that can be employed by the marketers include
Reposition the product in the eyes of the consumer – one of the most renowned example of this is Cadbury India’s strategy to reposition chocolates in India. Earlier, chocolates were perceived to be eaten only by children, but Cadbury changed the perception and positioned it to be something relished by the whole family.
Using pricing as a tool to reposition- Initially, Sony Laptops branded as VAIO were considered to be premium laptops and were priced much higher than the competitors’ laptops like HP, Compaq etc. Later, Sony came up with the E-series of laptops that are much cheaper as compared to the earlier VAIO laptops.
Enter into new markets- L’oreal focused on women with the Garnier brand in the past until it came up with the Garnier men brand. It started making cosmetics and skin care products for men under the brand name of Garnier men.
Repackaging – Repackaging is a great form of repositioning your product. There are numerous example of repackaging especially in the consumer product industry. Pepsi and Coke continuously come up with new packages for its cans and bottles. Pepsico’s Lays brand has also come up with new packaging styles. Recently, Lays came up with a new variant called the “baked” version of the chips which has entirely different packaging.
Many times companies misjudge consumer behavior and end up with a product that the consumers don’t identify with and hence it fails to create an impact. To avoid this, companies are coming up with testing phases before launching the product in the market. For example, KFC did an extensive test on its Kentucky Grilled Chicken line in some towns in America by launching it there exactly the way it would across the globe. They advertised it and re-did the KFC restaurants across these cities to create the same feel. KFC did incur a huge cost due to that but these costs were very less as compared to the amount a failed product would have cost them. Yet, this does not ensure a 100% success rate.
Many times it also happens that the sales of a product which had been doing well suddenly plummet because the competitor comes up with some innovation or better product or better marketing strategy.
Conclusion- Thus, repositioning and repackaging should be a part of the firm’s strategy and implemented regularly on the basis of changes trends and consumer behavior. The articles proves that how successful companies have invested in repackaging and repositioning to modify their product or service according to the changing needs.
This article has been authored by Harjot Dhawan and Dhaval Parikh from International Management Institute, Delhi.
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