What Is Repositioning? (With Approaches and Benefits)

By Indeed Editorial Team

Published July 18, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A positioning strategy is the angle by which a company brands, markets, and sells a product or service. Determining how to reposition an item or business involves marketers and other stakeholders reassessing the perception and success of their product or company. Understanding the answer to, "What is repositioning?" can help you thrive in the business sector through agile marketing and industry insight. In this article, we define repositioning, explain the various approaches companies take to achieve it, and list the benefits associated with regular repositioning in the marketplace.

What is repositioning?

The answer to, "What is repositioning?" begins with defining a positioning strategy. This marketing term refers to the capacity a company has to impact public and consumer perception about a product, service, brand, or company. Companies develop positioning strategies by identifying a target market segment, assessing its values and buying habits, then establishing a product and advertising approach that meets those standards. If there's any change in the target market segment, then repositioning occurs when the business attempts to adapt to meet those new demands.

Any business entity or asset can reposition, with some examples including:

  • A fast-food chain rebranding itself as an eco-friendly entity

  • An update to software that changes the logo and message

  • A company that originally relied on an international theme pivoting to a local market structure

  • An advertising campaign that re-introduces a company after a public relations issue

Read more: What Is Competitive Positioning? (With Tips and Advantages)

Approaches to repositioning

Repositioning is an opportunity, but it also requires strategy, time, and investment in its execution. Determining the ideal approach to repositioning is paramount for a company's short- and long-term success. Too much repositioning can lose customer trust whereas an insufficient dedication to market positioning can result in a shrinking market capture.

Repositioning can occur as one single approach or a combination of multiple methods. It's different from rebranding, something that alters a company's core identity rather than its components. While the two concepts differ, most companies use a rebrand as an opportunity to reposition through more than one method. Among the options are:

Product change

Product changes to meet consumer demand is a common approach to repositioning. If a company relies heavily on products, such as a makeup brand or telephone company, the demands of the target market change over time. For example, paraben-free makeup is now an expectation, as are smartphones, and Bluetooth compatibility. Repositioning through product attributes allows a business to maintain its current operations, brand, and sales while promoting a value that tests well with the audience.

Read more: How to Write a Positioning Statement in Seven Steps (With Examples)

Pricing changes

Price change repositioning is a popular approach that often occurs during challenging economic periods. It involves a company associating its wares with competitive prices. While good faith is for a company to actually cause a price reduction, the repositioning strategy involves consumer perception of that price change. For example, a food brand declares itself 20% more concentrated. It simply requires the company to reduce its dilution formula and maintain everything else about its current supply chain. So, whereas price changes can appear to be a more expensive business approach, they can also represent the most cost-effective method.

Read more: 8 Types of Product Positioning (Plus Examples and Tips)

Quality adjustments

When a target audience changes its priorities to value quality over other metrics such as price or environmental friendliness, many companies use quality adjustments as a repositioning method. This is the process of associating a service, product, or brand with a greater objective quality than its competition. Examples include companies espousing hand-crafted items, small-batch production, or something lasting 25% longer than the competition. Even if those facts were true and the company requires no changes, it can reposition using a quality model by focusing on those virtues.

Read more: What is Market Positioning? How to Develop a Strategy

Utility changes

If a target market segment places a demand on a certain function, then a utility change can be a suitable approach. A company can make a manufacturing change, such as including a vehicular attachment on a GPS device. Utility approaches require a company to alter the consumer perception of its use, rather than technically changing its design or utility. For example, consider a face scrub that technically works as a body wash. The company can market the multiple uses to reposition.

Read more: What Is Product Standardization? (Uses, Pros and Cons)

Competition

When new competition enters a market, such as the production of off-brand facsimiles of office supplies, a well-established company can focus on their competitive nature. Companies use the proven value of their merchandise, reliable shipping, low cost, or corporate social responsibility initiatives. This helps offset the company through a competitive approach to repositioning.

Benefits of repositioning

Repositioning is an extremely useful tool for companies that seek to grow with the market. It offers a wide variety of benefits including:

Improving sales

One of the leading advantages of repositioning is the ability to improve sales totals. Repositioning can enable companies to enter new markets and address new audiences. By assessing the public's perception of a business, and its products, a repositioning strategy can improve sales over the long term.

Increasing competitiveness

Because repositioning involves a certain level of advertising to influence consumer perception, it competes openly with other brands. Especially if relatively few companies within the same industry reposition concurrently, it can help a business highlight its value. For example, if fast food companies reposition, one can focus on organic food while the other can target the low-price market.

Read more: What Is Brand Competition? (Definition and Examples)

Diversifying your target market

Once a company clarifies its target market, it can reposition to better align with those values. Usually, this is through significant market research, ranging from surveys to digital analytics. It enables a company to better understand the priorities of its consumers. At the same time, this also allows the company insight into areas for improvement. Repositioning is the opportunity to learn about markets the company has yet to capture. It shows opportunities to gain the business of similar audiences, thereby diversifying the consumer base.

Read more: Target Market Examples (With Considerations for Your Own)

Engages the market with updates

Repositioning is an advertising opportunity. While prudent repositioning focuses on a straightforward message to optimize consumer engagement, it still makes the market aware of the changes. The purpose of positioning a company and product correctly is to recuperate the expenses of repositioning and profit from those changes. A successful initiative updates the market's engagement with a company, its values, and the new products. This adds advertising value which can contribute to the business's overall strength in the marketplace. By obtaining media attention, shelf space, and word of mouth, repositioning can benefit a business in multiple ways.

Read more: What Is a Target Market Analysis? (With Guide to Create One)

Promotes business agility

A business that prepares for a changing marketplace is ready to reposition in the most cost-effective manner possible. By planning for a potential repositioning requirement, companies know to gather data on consumers before that demand becomes apparent. Companies that employ data analytics on their websites, actively engage in social media, and use a variety of means to receive feedback are automatically better prepared for a repositioning.

The marketplace changes regularly, and an ability to adapt to it can differentiate a successful product or business from one that falls out of market favour. Companies that regularly assess the perception of quality, price, and utility of their goods have the requisite information to enact a change. Agile repositioning enables businesses to change their strategies responsibly.

Read more: What Are Agile Values and Principles? A Complete Guide

Make positive changes

Repositioning allows companies to embrace positive changes that impact the marketplace while also profiting the company. Some changes, including an increase in utility, can benefit consumers through added value while also increasing sales. Other repositioning approaches, such as environmentally friendly pursuits or engagement with charitable endeavours, assist with public perception while also improving the lives of consumers.

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