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Why brand repositioning is hard

Blog post   •   Jul 08, 2019 15:01 BST

Middle-tier brands are therefore the most likely to reposition, acquire competitors to gain scale in an attempt to become the reference point for their category, or fail when they get it wrong. If you can’t succeed in being a reference point brand, you have a choice of ‘moving down’ and competing mainly on price, or ‘moving up’ and finding new ways to distinguish the brand that commands a premium the consumer is prepared to pay.

‘Moving up’ isn’t easy. Historically, successful luxury brands have struck a sensible balance between exclusivity and accessibility but luxury brands too were slow to adopt digital media and online sales and have now had to rush to adapt to new consumer shopping habits.

For a mid-market brand, in order to move up, you either know your customers better, or develop a culture that breeds innovation and a business model that can continuously fund it, as consumers’ preferences don’t stand still. Brand owners in the squeezed middle space need to re-assess their brand’s positioning strategy to ensure brand differentiation distinguishes them from competitors.

Disruption, disintermediation, increasing customer expectations, market overcrowding, limited resources, data overload and data security are some of the challenges facing brands today, so it’s no surprise that brand repositioning is increasingly on the agenda.

Even the largest companies in the world are feeling the heat from disruption by ‘BigTech’. Huge and potentially risky M&A deals are the incumbents’ first line of defence, as evidenced by Amazon entering the prescription drugs market when it acquired Pill Pack for $750m in 2018. CVS Health and Walgreen Boots Alliance stock dropped over $11bn on the news with CVS responding by buying health insurer Aetna for $69bn to mitigate the threat. Boots has now announced it will shed 200 stores in the UK to cut costs. Across many sectors, a CEO’s worst nightmare is Amazon, Google or Facebook disrupting their marketplace.

BigTech has also transformed customer expectations. If Amazon Prime can deliver to you in hours, why do you need the high street? Tech players have put consumers in control with 24/7 access to whatever we want, whenever we want it; as well as making us better informed, and more discerning about end-to-end brand experiences.

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