Unsuccessful Repositioning Examples

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Unsuccessful Repositioning Examples

Let’s now look at some poor repositioning examples, which include:

  • JC Penney’s attempt to go upmarket
  • McDonald’s ‘premium’ Arch Deluxe burger
  • Pepsi’s attempt at a breakfast beverage
  • Coke’s infamous New Coke failed repositioning attempt
  • Tropicana’s revised packaging driving down sales
  • Plus a video summary of good and bad examples of repositioning at the end of this post

JC Penney Goes Upmarket and then Down Again

JC Penney is long-established chain of department stores in American. They offer a wide variety of merchandise, including clothing, footwear, cosmetics, electronics, jewelry, and home furnishings, across their 600+ stores.

In 2012, JC Penney failed in its attempt to effectively reposition itself as a more upscale retailer. One of their key changes was a switch from high/low pricing (lots of discounts and sales promotions) to an everyday low pricing strategy.

A key positioning goal of this change was to transform JC Penney into a more modern and fashionable brand, rather than being perceived as a discount chain.

In addition to the substantial change to their pricing strategy, they also added new brands, redesigned stores to de-clutter them and utilized high-profile celebrities to help communicate the upmarket switch.

Unfortunately, the strategy did not go well because traditional customers were excited about finding deals and discounts in the store. With the switch to a more “sophisticated” layout and the lack of price savings, many of their regular customers indicated that the store now lacked excitement.

In other words, the regular customers enjoyed the experience of looking and finding great discounts in the store, and the repositioning removed that benefit from them.

Overall, the repositioning was unsuccessful and there was a decline in revenue and profitability. Within around 18 months there was a change in management and their original high/low pricing strategy was reintroduced.

Key repositioning tip: ensure when you reposition that you do not disenfranchise your existing customer base.

As you can see from this video, consumers were unhappy with the pricing change because it took the fun out of their bargain shopping experience.

McDonald’s Existing Positioning Did Not Fit with the “Premium” Arch Deluxe Burger

In the late 1990s, McDonald’s introduced a premium burger known as the Arch Deluxe burger. It was designed to be a more sophisticated burger for adults.

The burger included higher quality ingredients and was designed by professional chef – please see the promotional video below.

According to the reports, McDonald’s spent over $100 million on the launch campaign for the Arch Deluxe, making it one of the most unsuccessful products in the history.

The key repositioning goal of the product was to help reposition McDonald’s away from being a family/kids only fast-food chain and becoming a chain that is also suitable for adults. While we know McDonald’s as that today, their positioning in the 90s was not as broad.

The product was unsuccessful for a variety of reasons, including: it’s taste, it’s price point, and most importantly, it’s inconsistency with the existing positioning of McDonald’s at the time.

In marketing terms, we would refer to the Arch Deluxe as a “upward product line stretch”, where expanding the product into a higher quality one was designed to help reposition McDonald’s overall.

Key repositioning tip: when starting from a perceived low-quality positioning, you need to reposition slowly, rather than stretching the product line too substantially.

Please check out the ad launching the Arch Deluxe with their professional chef…

Too Early for Pepsi AM?

In the mid-1980s, Pepsi introducing Pepsi A.M., a soda that was marketed as a breakfast drink. The idea behind Pepsi A.M. was to create a new category of drinks that would be consumed in the morning, similar to coffee or orange juice.

While this may sound a little bit unusual, research identified that some people were consuming Pepsi as a breakfast drink. Because Pepsi contained caffeine, like coffee, it became a convenient (easy to carry) quick morning drink.

While this is a failed new product, it was also an attempt to reposition the brand to a product that you can drink 24/7 = an all day drink, as opposed to a beverage suitable on hot days and/or with fast-food meals.

The product was double caffeinated (as compared to normal Pepsi) and was supported by a heavy advertising schedule.

Unfortunately, the consumers who normally would drink Pepsi in the morning did not want that known to other people. If they buy Pepsi in the supermarket and take it home – and nobody knows that they are morning Pepsi drinkers. Whereas, whenever they buy Pepsi A.M. – then everybody knows they drink Pepsi for breakfast.

Therefore, it was this social embarrassment that negated the success of the product. In addition, many existing Pepsi drinkers did not see a logical connection between Pepsi and a morning drink – which meant they failed to attract new consumers to the product.

The product was marketed for around one year before being discontinued. Today, however, is not uncommon to see products such as energy drinks and sports drinks being consumed by younger people as a morning beverage. So perhaps Pepsi’s morning drink was just ahead of its time?

Key repositioning tip: consider the changing marketing environment and overall consumer attitudes and perceptions before repositioning – maybe it’s a good idea, but just not the right time?

Check out this quick case study video on the failed Pepsi AM product and repositioning attempt…

‘New’ Coke Challenges Pepsi, But Fails

Way back in 1985, on the anniversary of Coca-Cola’s 100th year, they decided to reposition the brand by introducing a new formula known as New Coke. Please see my related articles on the Pepsi and Coke repositioning battle.

The key reason for introducing New Coke was to reposition the brand to challenge Pepsi who had substantially increased their market share in recent years.

Pepsi was successful because they were running the tagline of “choice of a new generation”, had the celebrity endorsement of Michael Jackson, and their product taste was generally researched as superior in double blind taste tests.

Coke believe that with New Coke they could out position Pepsi because their Coke would be “new” (younger and more modern), would taste better (which it did in their research testing), and they would use advertising to associate with music to defend against Pepsi’s Michael Jackson connection.

Unfortunately, the launch of New Coke was met with negative reactions from consumers, who were quite unhappy that Coca-Cola had discontinue their original formula. That is, the original (classic) taste of Coke was taken away from existing customers.

This resulted in substantial backlash and reduce sales, to the point where the original Coca-Cola was reintroduced within several months as Coca-Cola Classic.

Key repositioning tip: consider the emotional attachment of existing customers with your brand – do they want the brand to be repositioned?

Here is a case study of what happened with New Coke and why Coca-Cola decided to revise its formula and why it eventually reintroduced Coca-Cola Classic…

Who Knew that Packaging Would Make Such a Difference?

In a now quite famous marketing case study, Tropicana redesigned its packaging in 2009 in an attempt to push the brand upmarket and create a more adult and premium image.

There were substantial changes to the packaging including the removal of a very familiar image on the pack (an orange and a straw). And the change was heavily supported by a $30 million plus advertising campaign.

But instead of sales going up, they reduced by around 20% – not a great outcome for this market-leading brand.

There were several reasons for the reduction in sales, including reduced in-store recognition, a consumer perception that the product had changed, and a perceived shift away from its traditional target market.

Within a few months, the old packaging was reintroduced in an attempt to recover its market share in lost sales. But the brand failed to understand was that their original packaging was a key part of their brand and had helped ensure loyal customers for decades.

The failure of Tropicana’s repositioning effort was a reminder of the importance of understanding the emotional connection that customers have with a brand’s packaging and visual identity.

Key repositioning tip: all your marketing mix elements work together – changing one element can reduce the perceived consistency and value of the brand.

This is a TV news report on the Tropicana packaging change at the time…

 Video Covering Both Good and Poor Repositioning Examples

Summary of Key Repositioning Tips

  • Ensure when you reposition that you do not disenfranchise your existing customer base
  • When starting from a perceived low-quality positioning, you need to reposition slowly, rather than stretching the product line too substantially
  • Consider the changing marketing environment and overall consumer attitudes and perceptions before repositioning – maybe it’s a good idea, but just not the right time?
  • Consider the emotional attachment of existing customers with your brand – do they want the brand to be repositioned?
  • All your marketing mix elements work together – changing one element can reduce the perceived consistency and value of the brand.

Why Reposition a Brand?

Repositioning a brand is a challenging task and one that should not be undertaken lightly. For a product to be successively repositioned, the brand perceptions – held by the consumers – need to be changed.

It is not simply a matter of changing the marketing mix or the marketing communications, but the positioning change needs to be executed in the perceptions (understanding) of the target market.

The more established a brand is already, the harder it is to be successful with a repositioning strategy.

So why would a brand want to reposition? There are several reasons including:

  • the brand has reached its potential and has limited growth potential
  • the brand has a poor market positioning
  • to better meet changing customer needs
  • the brand image has been damaged
  • the brand has been impacted by new competition
  • aggression competition has weakened the brand’s strengths
  • the firm wants to enter new markets or segments
  • in order to command a higher (premium) price and margin
  • the brand’s products are in the decline stage of the product life cycle

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