Abstract
A company's positioning strategy is focused on how the company wants its brand to be perceived in the market. However, the constant change of markets has led many companies to carry on repositioning strategies to deliberately change their strategic positioning, namely by widening its product or service benefits to attract a wider market audience. As product or service positioning is always defined by the consumer, there is the need to understand the extent to which each company is able to communicate its new intended positioning and actually make it perceived. This chapter presents the case of Pedras, a Portuguese brand of naturally sparkling water which ramped up its communication efforts regarding the extension of its product's benefits in order to minimize the potential gap between intended and perceived positioning. Digital communication strategies are discussed to engage young consumers.
TopOrganization Background
This chapter explores the big challenge of repositioning from a product associated with elderly people and digestion functionalities to a refreshing product targeting a wider and younger market. Pedras is a brand of sparkling water that is naturally carbonated; its unique profile of minerals and medicinal benefits were discovered in 1871. These attributes were admittedly seen as a competitive advantage and soon the company became an iconic brand on the Portuguese market, and eventually became the leader of the domestic sparkling water market. But these strong associations to the product extended to the whole category of sparkling water in the country, which soon after started to hamper the company’s growth. These medicinal attributes became so strongly connected with the product category and the brand that it limited the other benefits associated with the type of product, even though sparkling water can have a wider range of benefits, such as refreshment.
As a result, in Portugal people used to perceive the benefits of sparkling water in association with malaise, which was a very restricted market for its potential when comparing with other countries whose consumption culture used to include sparkling water in daily meals. In this sense, in Portugal the consumption of sparkling water tended to lose significance, because it was represented mainly by elderly people. The consumption of this type of water was deeply associated with habits from the past that ceased to prevail with the evolution of society and the emergence of medicinal alternatives. The product “Água das Pedras” became a beverage suitable only for digestion or malaise-related problems, mainly associated with elderly people and with an antiquated image.
Considering the sparkling water market, in Portugal two brands stand out in terms of refreshment attributes which Pedras would later define as its intended repositioning strategy: Frize (born in 1994), and Luso Gás (born in 2014). Both brands are significantly more recent than Pedras, which arrived in the market in 1871. Therefore, these two brands achieved from the beginning a positioning more suitable for the current market than Pedras, which had to go through repositioning strategies to take the best advantage of the market throughout the years. This is attested by the fact Pedras positioning is more strongly connected with the market positioning oriented towards digestion and perceived as less modern than other sparkling water brands.
A fact to consider is that this repositioning strategy was more transversal rather than just a new communication direction, and involved the creation of new products. Regarding this topic, introductions such as Pedras Sabores (the flavored water range) should not neglect the process of consumer familiarization with a new brand, even though it is a sub-brand of a very strong brand in the market. Pedras Sabores was created as a new range brand of flavored sparkling water to compete with Frize. The sparkling water market, including flavored sparkling water, is strongly associated with digestion, with the flavored range only slightly surpassing this attribute —lifestyle-wise, the performance of flavored sparkling water is, on the other hand, very good in comparison to the other categories. In this respect, Pedras is the brand least associated with the flavored sparkling water market and with its flavored portfolio, which means that it is the brand capitalizing less on the commercial opportunities of its flavored range. Frizee brand, in turn, is more connected with the flavored range.
Repositioning is a challenge, as it involves changing consumers’ mindset. In this case, repositioning involves extending the perceived benefits of the product besides other non-materialized attributes. In the case of Pedras, this repositioning is challenged by the fact that there is an enormous connection between the brand and the product category, since in Portugal Pedras designates the category of sparkling water, making it harder to disconnect from the attributes given by the market. On the other hand, Pedras brand boasts a very long history of tradition that is very dear to the Portuguese whose consumption experiences are passed on from generation to generation, including some knowledge about the product, advices on the product’s medicinal benefits, along with a series of myths (which in some cases are detrimental to the acceptance of the new benefits). This heritage and importance of the brand for the general population made it an icon, which in turn remained very much untouched over the years, without incurring meaningful brand or strategy changes.
Key Terms in this Chapter
Positioning: Positioning is present in the initial definition of the marketing strategy, where there is a study of the market, the competitors’ network and the consumer ( Zhang et al., 2016 ). Equipped with this information, the company sets a plan to differentiate itself from others, delivering a promise to consumers by transmitting a specific image and benefits to the targeted segment of the population in order to have a distinctive value in comparison with the other alternatives of the market. Positioning is the definition of how the product or service should be seen in the eyes of the target consumer in order to achieve a different placement in relation to the competition, and thus create customer-focused value.
Revitalization: Revitalization is implemented when there is the need to rejuvenate the brand, so it is contemporary and in accordance with the tendencies of demand ( Edwing et al., 1995 ). Latif et al., (2016) point out that this need to rejuvenate from the narrow and strict idea that people have about a product to more diversified benefits can be accomplished by reinforcing its presence among a younger target via line extensions, which will eventually bring collateral benefits even to the brand’s classic products. Revitalization can be a consequence not only of deficient acceptance of the full benefits of the product, but also of pure brand decline for being old-fashioned or struggling with equity problems ( Thomas & Kohli, 2009 ). Therefore, revitalization is linked to the need to increase consumer loyalty through reinforcement of perceived quality and recognition. This approach is adopted in companies with a long past that see themselves trapped in a positioning centered on its heritage and classic icons. This need of change must be balanced with the risk of a company losing its previous customer base by positioning itself in a segment that is too young, and completely lose its roots and authenticity, two attributes that are always a point of differentiation from the competition.
Repositioning: Repositioning is a marketing strategy in which there is a deliberated change of a brand’s positioning and therefore on how the company wants to be perceived by the target, by delivering a new proposition ( Zahid & Raja, 2014 ). This strategy takes place when there is an added benefit from changing the company’s position ( Wang & Shaver, 2013 ; Zhang et al., 2016 ), which can result from a new economic or competition reality (the entry of a new player, or an existing brand that positions itself closer to the company), the emergence of new opportunities (technological innovations, customer preferences, market regulations) or simply a consequence of the natural course of the product’s lifecycle. Some authors state that repositioning is the best strategy for these situations and a source of competitive advantage, as it is a tool that allows the brand to differentiate itself from the competitors ( Zahid & Raja, 2014 ).
Consumer Perception: Consumers’ brains make a connection between different concepts and information they have absorbed, creating a schema, and if the information from the outside is not remotely aligned with their current schema, it will be automatically rejected by the consumer ( O’Donnell & Brown, 2011 ). This is a result of selective perception, where in the presence of several alternatives of products or services, the consumer will only focus on the perceived alternatives conveyed by the message being communicated, and thus to fit their needs and interests. Nonetheless, if this information is utterly in accordance with the schema, the lack of new information will not spark the consumer’s consideration. Therefore, the conclusion to withdraw from this information is that the messages communicated should not be disruptive in comparison to the schema the consumer has already formulated, but they should have added value to create the necessary attention to be able to influence new behaviors ( O’Donnell & Brown, 2011 ).