Re-positioning a Brand

In this latest episode, Mark and Lorraine talk about the two definitions of re-positioning: 1) what we do to competitors every time we position a client and 2) what happens when clients have to re-position their own brands. From Coke/Pepsi, Avis/Hertz, and about another dozen brand examples, including one of our clients who is currently re-positioning, Mark and Lorraine explore the excitement and warnings that come with re-positioning a brand.

Spend 30-ish with Mark and Lorraine to learn more about advertising, marketing, and positioning.

Transcript

Mark Vandegrift:

Welcome to the latest episode of the Brand Shorthand Podcast. I'm your host, Mark Vandegrift. With me is the world's most differentiated marketing strategist, Lorraine Kessler.

Lorraine, we're going to reposition the position of our positioning podcast today. How exciting is that?

Lorraine Kessler:

I don't know, I'm going to have to get used to all your crazy intros. Oh my gosh. I'm glad my family's not here because they'd be going, what? We didn't know you did that. We just knew you were never home.

Mark Vandegrift:

Yeah. Well, today's topic, if you haven't guessed already, is re-positioning.

It's a topic that not too many marketers ever consider. But in one sense of the word, it's done almost every single time you position a brand. Why? Because a good position automatically repositions the competition and in fact, multiple competitors at a single time. Then there's the other definition of repositioning, which is when you have to change your own brand's position, but we'll save that for the second half of the podcast. So let's begin with the first definition of repositioning. I'll say it again. Repositioning a competitor while creating a position for your own brand. Lorraine, what say ye?

Lorraine Kessler:

Yes, and this is when we work with clients to establish a brand position or help them better perfect an idea they have so that they understand it better as a competitive strategy, which fundamentally positioning is a competitive strategy. We're always thinking about how does this idea reposition the competition. And that means kind of, paint the competitor into the corner of their own making, right? Because no brand can stand for all things for all people. That's the essence. So you can't be the new thing and the old thing at the same time. It's just not credible, falls apart, doesn't work. So we, first, when we do this, we have to help the client in establishing their position, kind of look at the whole competitive field, whether it's one competitor or many and just a new idea in total for the category. But we have to have them identify who they're going after, right? It can be, let's just make it simple. Let's just say it's company A and I'm company B. And company A, why would I choose company A as my A? Most times because they have the market share and with market share goes money. And so this is the Willie Sutton of brand marketing, right? And for those of you who don't know who Willie Sutton was. He was a famous bank robber and he was interviewed and asked, why do you rob banks? And he answered very obviously, that's because that's where the money is. 

So we help clients understand that if you're going to come into a market, where are you on that category ladder? We talked about that in one of our podcasts. You're obviously not number one. Can we aim at number one? Why aim at number one? Because that's where the money is. and then what's their position and how do we go east to their west? How do we go opposite? So that's super important. 

If we're in a category that's cluttered with many competitors and we're way down the ladder, five, six, seven… our job would be to try to become number three. So then we would have a different strategy on how we would go about the market. But still, we would want to reposition one and two. We'd want to be something new. Right? So if one is old and one is new, what's something new, what could we be? So that's where maybe it's an attribute or whatever. So that's first.

Mark Vandegrift:

I think the Willie Sutton comment… so you're saying he might have liked Jack Trout's book In Search of the Obvious that he dedicated to the agency and Dick Maggiore, right? Yeah.

Lorraine Kessler:

Yeah, yeah. Oh, absolutely. I love that. Yeah.

Mark Vandegrift:

Good. Well, there's certainly lots of ways repositioning a competitor happens. So let's kind of review a few. So the one you already referenced without saying their names is Coke. So They're the original since I think 1886. And then in 1964, Pepsi comes along and comes out with a new cola, the drink of a new generation. Explain, Lorraine, how without doing a single thing, Coke was repositioned.

Lorraine Kessler:

By Pepsi being the opposite to Coke's position as the old traditional, the original, that appeals to people who love the idea of that traditional flavor, the first to the category, feel secure in that. So Pepsi comes along with we're the drink of an east to the west of Coke. 

What it did is it trapped Coke so that they couldn't also credibly say that they're the new thing without leaving or abandoning their position. So one of the things I want to say is when you reposition against a specific competitor or competitors, you're looking for an inherent weakness in the leader's strength. So what's the inherent weakness in Coke's strength? Every strength has an inverse weakness. The strength of being the oldest, the traditional, is that you can't be the new thing. That is an inherent weakness. I can't fix that. And we all know from history, Coke tried to, and after billions of dollars, and probably one of the greatest lessons in marketing history, tried to, with New Coke, to say, hey, we're both the old thing and the new thing. And the problem with that is, the loyal Coke drinkers, much like we're seeing with the loyal Bud Light drinkers today, said, what did you do with the Coke I loved? Right? And the people they were going after, the new segment, who wanted the hip new thing, didn't believe it. Like, I don't believe new Coke is better than Pepsi. So they lost on both fronts, plus they doubled their inventory and their canning and all that kind of stuff. So it created a lot of problems. So that illustrates how a number two brand goes after a number one very clearly.

Mark Vandegrift:

Yep. Another example is Avis who trailed Hertz, who was the leader in rental cars. They actually had a 60 plus percent market share, Hertz did. For those who don't know the story and how successful the “We Try Harder” campaign was, consider that within a year – a 12 month period – Avis went from losing $3.2 million to earning or being profitable $1.2 million… the first time it had been profitable in more than a decade. From 1962 to 1966, their market share grew from 29% to 36%. But get this, as Hertz ignored the Avis campaign, the market share percentage gap between the two brands shrunk from 61%-29% to 49%-36%. And based on that trend that happened in just that short period of time, Hertz executives projected that by 1968, Avis might be need a new campaign because it would have meant they would have become number one. So Lorraine, explain to our audience the reason this works so well for Avis and how their campaign repositioned Hertz by taking advantage of what you call the inherent weakness.

Lorraine Kessler:

Yes, this is probably one of the greatest examples of attacking an inherent weakness. And let me illustrate this a little bit, this principle, is: when you reposition attacking an inherent weakness, what you're doing is you are exposing a negative perception about the leader that anyone can verify as obvious. So you're not slamming someone with lies or slanders. You're simply pointing out to the audience the negative perception that comes with whatever perception they have. There's always two sides of the coin, right? That inherent weakness. So in this campaign, Avis used its position on the category ladder. We talked about where you are, one, two, three, four, five, six, seven in high consumer brand categories. Most people... We'll remember seven brands, but in lower it's only three. So you really want to be one, two or something new. In this case, Avis saw that it was number two and it had a lot of weak sisters, a lot of really weak brands. So it aimed at number one, but it really hurt a lot of the other competitors in the space. I mean, a lot of those dollars came from there as well as from Hertz. So they attacked this inherent weakness that when you're number one, right? You just don't try as hard. You just don't have to. 

And I think the psychology of it is most interesting because it's an underdog psychology. The first ads that Avis ran, the “we try harder” line was buried in the copy. It was like the first line in the copy, but it wasn't the headline. Here were some of the headlines: “Avis is only number two in Rent-a-cars. So why go with us? We try harder.” So you see how they engage the audience? They said, hey, we're only number two. Guess what that does? It creates an emotional connection. I automatically feel like, oh, wow, look at these people. They're like me, you know, they're vulnerable. There's just a beautiful psychology there. They had the other ads where “Avis can't afford dirty ashtrays,” okay? “We try harder. Avis can't afford not to be nice. is we're only number two and Avis can't afford to make you wait. Right. Cause we're only number two.” So the, we try harder becomes kind of like the headline on this campaign, but the real gist of it was an underdog position. They're number one, we're the underdog. Therefore we behave differently. And so being a society in America where the underdog status is only something that emotionally touches our heartstrings. It's a great way of going at it. So it was a great strategy because number two has to go against number one. They went against them with honesty. And guess what? What's even, what's Hertz gonna say? We're number one. We try as hard as number two. I mean, it's just like…

Mark Vandegrift:

It doesn't work.

Lorraine Kessler:

You're blocked into your corner. You're not gonna kind of say we're number one trying to become like number two. So it was a perfect play.

Mark Vandegrift:

Yeah. Well, you know, Coke, Pepsi, Hertz, Avis, the very recognizable brands. And a lot of people might say, well, you're always using these obvious things. It's because universally they convey concepts, right? Because if we start talking about some niche brand, I don't know that everyone would get the concept. 

But let's go there a little bit. We we've seen the most frequent way that you can reposition a brand. That's the inherent weakness. But let's discuss another common way that it happens. And that's by way of introducing a new type of thing. Now, what I mean is Pepsi wasn't a new cola. It had a different formula, but it wasn't like, this is a new cola, unlike 7Up, which was an un-cola, right?

Lorraine Kessler:

Or an energy drink.

Mark Vandegrift:

Hertz Avis, they were both in the rental car industry. It wasn't. a new rental car, although Enterprise later came along with “We Deliver,” which was a little bit different on the service.

Lorraine Kessler:

But still in the category you're talking, the category is rent a car. The category is, uh, what was Colas? I'm sorry.

Mark Vandegrift:

Yeah. So one great example, I think, in the last decade is online banking leader, SoFi. They automatically reposition the traditional bank by introducing a new online framework for banking. So Lorraine, I think you're pretty familiar with this story. Why don't you walk us through that?

Lorraine Kessler:

Yeah, so fine you're talking about SoFi, right?

Mark Vandegrift:

SoFi.

Lorraine Kessler:

Yep. You know the fintech and digital bank and what they're really doing is they're creating a new banking model that You know, they've they're repositioning themselves from what they were known for which was I believe student loan Refinancing, right? So students who people have loans who are student loans knew so fight pretty well Well, that's That's a logical place to connect to because you're in loan business and you are in lending and who does that? Uh banks So now they're expanding that they've made a lot of really serious digital technology acquisitions and they're positioning themselves as a banking and tech powerhouse. So not just student loans. But they can do that because when you reposition your own brand you have to connect to something to your past, to something that makes sense. That's a logical, there's a logical strain. You're not going to go to becoming SoFi being known as a banking and tech powerhouse from selling chewing gum.

So I think what they’ve done, of course, is hang a negative in their advertising on traditional banking. I think their campaign says, “break up with bad banking and move on.” I mean, it's great. I just love it. It's just because and then they have these commercials that we talk about how the creative should dramatize the pain or the reposition. So you have this old banker guy sitting next to this girl eating stuff while she's trying to watch TV. It's humorous, but it's with a point. And you really are like, yeah, okay. This is a really tired, the old banking institution is a really tired kind of way of doing business. And it deserves to be kind of punched at. And this creates a new way of doing banking.

Mark Vandegrift:

Very good. Well, thing one, are there any other repositioning campaigns or efforts that you can think of that fit this first definition that we're discussing for repositioning?

Lorraine Kessler:

Yeah, sure. One of them, let's see, and again, what we're talking about are brands competing within an existing category against other brands based on their position on the category ladder. So Scope was a brand new mouthwash 40 years ago. And when they came out, they're famous for a campaign. And again, I would like our listeners and viewers to pay attention to the principle, not the age of these illustrations. But when they came out brilliantly, who was number one? Listerine. And they came out and they said, minty breath, “we have minty breath versus medicine breath.” They labeled Listerine medicine breath. They said, “do you want your mouth to taste like a hospital?” Literally in their campaign. So then people thought about that and they thought, “no,” so we have minty breath.

And that campaign of course, was really attacked the inherent weakness more plainly than any I can think of. But here's where Listerine at that time showed great fortitude in their own position. And they came back with a campaign that said, “the taste you hate twice a day,” right? Because their thing was we taste like medicine breath or a hospital because we're killing germs.

So if you just care about kissing and fresh breath, okay, we'll kind of let that go. And they let it go for a little bit. Now, of course, there's Listerine with all these different flavors out there, but they were able to maintain their position. And that was a pretty interesting response. That was kind of what I said, kind of bucking up on your position in response to a counter. Yeah.

Mark Vandegrift:

Sure. These are great examples. Do you have any others you can share?

Lorraine Kessler:

Yeah, Lowenbrau and Becks were both German beers made historically in Munich for many, many years. But then in 1975, Miller Brewing bought Lowenbrau. And first, they imported the beer to the US market, and then they started making it. So anytime you bought Lowenbrau in the US, you bought an American-made product with a German formula and name or history. And that became the #1 selling German beer in America. So Becks, wanting to enter the US market, ran a campaign that said, “you've tasted the number one German beer made in America, now taste the number one German beer made in Germany.” So this is what we call a heritage position or reposition, because it, and again, I want to go back to the point, it hung a negative on the competitor that anyone could verify. as true. So this wasn't making up lies. Lowenbrau was made in the U.S. and then it leveraged Beck's heritage – a beer made in Germany would probably be better, tasty, and more authentic than a German beer made in America.

Mark Vandegrift:

Love that. Great example. Well, let's move to our second definition of repositioning. And that's whenever you find yourself having to adjust your own brand's position.

So, Lorraine, give us some examples that you cite of brands who got this right, and maybe some if you can think of any of those who didn't.


Lorraine Kessler:

I think another institution that has done a very good job of repositioning, taking it some time, are public libraries, right? Because public libraries really got crashed with Amazon and all the digital media that became accessible through Netflix and... put in your home and I could get it easily. Why do I need to go to a library to get the internet? Why do I have to get a library to get access to information? I have Google. So I think libraries had to kind of back up and say, “what is our real value in this competitive world?” And I mean, they're dealing with crisis, change and competition. Because their competition is Amazon and Google and Netflix and everything else. 

Well, through the years, they made amazing partnerships, like with Libby Books and with Hoopla, to make all this media content accessible for free. Books are for free, of course. But in addition, they've layered it with what I would call kind of a community-specific cause. They really serve as the place for people in the community, whether seniors or people in need of different job skills and help, and children in early learning, that they can deliver that mission. You can not get that mission delivered by Amazon. You're not going to get it delivered by Google. So they've kind of, I would say, repositioned by going back to the free concept of a community based library that serves to educate its populace in many ways. You know, the ways that they do it. So I think that that's a really good reposition. 

And of course, there's, you know, I mentioned Netflix. And I think they did one of the best repositions, not that they didn't have a couple bumps in the road because they did, but if you remember, Netflix was known for the DVD and the mailbox. Okay. And you ordered online, which was, was new at the time. And then this DVD came within 24 hours and you popped it into your, you know, player and you were able to watch whatever you wanted. So it was entertainment that was accessible and easy, convenient for me and it was entertainment in my home.

So they got ahead of the streaming curve earlier than anyone else. And they recognized, and this is attacking yourself, right? Even though each year their DVD subscriptions were growing, they decided to attack themselves with streaming, which was new and people didn't know how to do it quite, but they invested billions of dollars in platforms and how to do it. And what happened is they leapfrogged everybody else into the category, not without disruption, right? Because the DVD problem was that they tried to raise prices on that and that didn't go over so well. And they tried rebranding their DVD business, Qwikster, and that didn't go over well. But those were minor pieces of turbulence. The main move, the brilliant move, was they got to streaming. They got there before anybody else. They had a really head start on something that required a lot of investment. And now people barely remember Netflix as a DVD service.

Mark Vandegrift:

They certainly got to a point where we would have all questioned why they were doing what they were doing, but they saw something coming that the regular populace didn't. And so they took a bet on that and won. I think other companies have tried to take a bet on something and it was either too early or it never panned out the way they expected.

Lorraine Kessler:

Or they didn't have the money. They didn't have the resource to invest in it or what have you, yeah. There's lots of ways that can fail.

Mark Vandegrift:

Yeah, certainly. Well, give us a brand that should have repositioned and maybe didn't or should have done something differently than what they did.

Lorraine Kessler:

Well, if you go to the Innis Maggiore website, you'll see a wonderful blog written by Dick Maggiore on Kodak. And every time I think about Kodak, literally right now, I'm feeling the pain in my shoulders. When anybody does this, they're trying to protect themselves. So that's a natural gesture for me, because I really feel their pain. 

I mean, here's Kodak. Kodak owned film. They owned everything to do with the camera and film. Remember, the yellow canisters were just like the Coke bottle for them. And ironically, they saw a trend coming early on and they, with all the resources you would think they would. They invented the digital camera. They actually, in 1975, they actually were the first to understand and to invent the digital camera. But here's where they made the blinded mistake, right? And this is where greed, can overtake vision and yeah, you do have to make a bet. 

But what they decided to do was not market the digital camera and the digital technology they created because they were afraid it would cannibalize their current film business. Of course it would, but you have to look, are you going to look short-term, are you going to look long-term? Where's the wave? Do you want to be, like I said, that surfer on the, or do you want to be behind the wave? And so what happened is they didn't embrace that and they left the door open for competitors to jump into that space. And of course, their entire company was now disrupted and cannibalized. Only that money didn't go from one bank account that they own to another or one pocket to another. It went right out the door. So that's probably one of the most dramatic missteps, I think, in not addressing.

Mark Vandegrift:

Do you think Kodak should have launched the digital camera with a different brand name, or do you think Kodak could have made that shift from film specifically to maybe a slightly broader: “we own the camera”?

Lorraine Kessler:

I know in Dick's article he says that they could have created a new brand name. I'm not really sure which way I would have gone with that. I think if I used, and I'm not saying there's one right answer, I guess I'd have to work with them. But I really think with their position and the strength of the Kodak name, really meaning “the times of your lives on film,” I mean on pictures, there's something to build on with the Kodak brand and expand it. into digital. It's just a new technology. It's the same thing. Basically, I feel the same way about the photos on my camera. They're photos than I did. The means to how I got there is less important to me than what the content means. So I think there could have been … and again, with all the resources, I would have led that with PR. I would have talked about digital. I would have talked about the new thing that's coming, what it offers, and attached my name to it and had a lot of PR as kind of my advance army. So.

Mark Vandegrift:

Well, we have Netflix as an example now that, you know, if you wanted to attach them to DVD, I guess you could have, but they were more attached to movies, which is the medium that you're consuming. And I think Kodak probably could have used that same model had they attacked themselves, but like you said, they were afraid to do so.

Lorraine Kessler:

Right. And they tried, by reverse engineering by putting the Qwikster name on DVD, and that didn't go well. So they kept they ended up going back to the Netflix name. So, I mean, these are tough decisions and it's hard for me to say what would be right. But I would not throw over the Kodak name again, the means to which what does the consumer value the ability to capture their world and to have it in some sort of picture, whether it's a moving picture, a video, or whether a static picture. How we do that is less important.

Mark Vandegrift:

Well, and you know, when you think about this second definition of repositioning, it does take time. Minds don't change. That's one of the key things about positioning. we always tell clients, is it's really hard for minds to change. So Netflix, the bumpy part of that was them repositioning. Us not necessarily seeing it in general as a population, but them knowing where they were going and being willing to take the time for that to happen. 

So repositioning, getting a mind to change what they know about your brand, takes a little bit of time. We just recently started a reposition for one of our own clients. And I think they'd be excited we're talking about their efforts because it really is what I would say noteworthy and it's applaudable. Babcock and Wilcox were known as the “old coal guys,” if you will, okay? That's a very, oh, I don't know. layman's way to say what they did. They're much more involved and technologically advanced by that. But just the mind concept was the “old coal guys.” 

And the world knew them as that for 150 years. Thomas Edison used one of their boilers and wrote a note that said how wonderful their boilers were. So they had a reputation that was pretty stellar. So repositioning was going to take time if they decided to proceed with that. And to their credit, the entire enterprise agreed to move forward to become known for their new position of “the Clean Power Production Technology Company.” This is a mammoth shift. You know, it's kind of the Coke Pepsi thing. They're the old thing, but now they become the new thing. But I think this is a different paradigm, maybe?

Lorraine Kessler:

This is more what Kodak should have done.

Mark Vandegrift:

Yeah, yeah, and it's not a mammoth move. I think that, why don't you tell us why you feel this could be done, and the moves that we suggested to them to make this possible, then I'll explain a little bit where things stand today.

Lorraine Kessler:

Well, they were in the power generation business. So if you separate coal as the means by which you create power, they understood power generation better than anyone. And who better to know how to turn old fossil fuels and things into clean energy than the people who knew how to combust it to begin with. So to me there's a connection to their technological expertise and power production. And power production, as we know, is evolving into new types of cleaner energy and fuel sources. And also capture of carbon. So these are all, and like Kodak, they had already perfected technologies for carbon capture years ago, right? And they were just sitting on the shelf, kind of like they are, we already have it. So I think there was a real connection to their history. And there's certainly a sophisticated company in power production. And so they can follow this trend towards new sources of energy better than anyone.

Mark Vandegrift:

Yeah. Well, and they're on that noble path, certainly. To their credit, they have their foot down on the clean power production accelerator. They actually split their P&L so that clean energy now reports as its own profit center. And management has appointed some of their top talent to this new division. The other thing that works for them, and this really is a calculated move, is that any of their existing customers who are all very entrenched in coal and other traditional fossil fuels or other methods of power production, they all have to adapt as well.

It's not like, “oh, I can hold onto coal or I can hold onto other traditional methods.” So who would you look to more than your current provider of the old technology to get you the new if they offer it? And certainly B&W offers that. So for an existing power production partner to do that makes sense. So their path is pretty clear. New customers will adapt their clean energy technologies that they develop like hydrogen production, waste to energy technologies, solar. And they have a ton of other exciting technologies they've introduced. And their existing customers with traditional installations will have the advantage of transitioning over instead of having to work with completely new installations. So it's really a great move. 

And I don't know, I think we feel pretty proud that they've allowed us to come along with them in the journey. They have a long road to haul because there are a ton of new clean energy companies out there. But within a couple of short years, they're already making huge inroads in the clean energy market. So I think they're a good example of repositioning done right. We'll see how it plays out. Maybe a decade from now, we'll be looking back and saying we did everything right. Or hopefully we're far from the Kodak story because if that happens, we'll all be upset. 

So Lorraine, what final thoughts do you have on either B&W or the topic of repositioning here as we draw this to a close?

Lorraine Kessler:

Well, I think repositioning is one of the most fun games to put your mind in, right? How do I maneuver and flip my competitor, who's number one, on their back, use their strength against them, attack their inherent weakness. That's always fun. 

You know, it reminds me of playing field hockey because I was, I had amazing skill work, stick work, great defender, but slow as molasses. So, so if I got passed up by a fast forward, one thing I knew, I'm done. So I had to have better stick work and I could use their speed against them by doing what's called like little lateral types of stick work. So they would literally, I'd steal the ball, and they would be so far behind me, I could drive it all the way down the field because I had to use my skill against their strength because I didn't have that strength. 

So, you know, to me, it just relates to everything in my life. So I think that's fun. 

In terms of Babcock and Wilcox, I think one of the things that we talk about is how do they sustain this new reposition? You mentioned it. It's not just advertising. It's not just, we can't create press when we don't have news. It's really their commitment to new technologies, bringing forward new technologies. The more they act, the more they say, this is who we are, and they act that part. And the more that they have to credential that, the better.

Mark Vandegrift:

Yep, they've really operationalized their new position. And that's what we always say about positioning. It has to impact the whole organization from production to operations to accounting to HR to everything. 

Awesome. Well, that's it for our latest episode of Brand Shorthand. Thank you for joining us. And we look forward again to another episode next week as we always dive deep on some of the core concepts of positioning.

Until then, have an amazing day.