Marketing (Repositioning) Essay

There is a wide range of forces acting upon organizations which make the need for service repositioning inevitable. The main forces include changing technology and expectations of customers, increased competition and changing nature of economic relations, etc. Today, repositioning of existing service offering becomes a strategy which helps companies to sustain strong market position and resist competition. Following Lovelock and Wirtz (2003) repositioning can be described as changing service characteristics aimed to meet new market conditions. The main sets of conditions for service repositioning include (1) a market decline, (2) competition and (3) changing customers’ needs. Therefore, reposition ­ing is about the new vision of the company in the customers’ minds. It is about earning customers’ trust to make them willingly follow the company. Market decline is the main reason which forces companies to reposition their service offering to remain profitable. For instance, if rates of return are below â€Å"competitive† rate it can result in withdrawal from the industry and a decline in activity and competition. In this situation, companies need to reposition their service offering in order to find new markets and new target groups. Repositioning is the best strategy used by companies to enter new markets essential for the opportunities and new competitive positioning. For instance, in order to survive â€Å"Fast Company† created a strategy aimed to reposition the magazine â€Å"in the minds of advertisers—a task that depends on first repositioning in the minds of readers—and then executing† (Lindsay, 2005). Airline carriers use repositioning strategy to avoid market failure and decline. (Essential repositioning of the Airline. Luxair, n.d.; Europe’s Winners and Losers, 2001). Also, this industry repositions itself in order to maintain high growth through optimization of a product mix and technological innovation. Very often, companies reposition their service offering using a quality/price strategy. Some airline carriers have positioned their brands selling for twice the price of services emphasizing their national origins, demon ­strating how quality and price can be reinforced (Essential repositioning of the Airline. Luxair, n.d.). It is possible to say that airline carriers seek to change the experience of buying and using a service (the service benefit) to prove a price position (Lovelock and Wirtz, 2003). Increased competition and new market entrants can force companies to reposition their service offerings. On the one hand, new entrants to an industry bring new capacity, a desire to gain market share and position and new approaches to serving customer needs. It is important to note that new competitors can have a negative impact on prices. Their strategy can result in reduced industry profitability (Lovelock and Wirtz, 2003). In this case, repositioning their service offering, companies try to find new service benefits to attract potential consumers. For instance, tourism market in Jamaica needs a reposition in order to compete on the market and remain competitive. Golding, a leader of Jamaica Labour Party, says that the industry is â€Å"running a risk right now because there is significant increase in the number of rooms, particularly with the Spanish investments† (Reposition tourism marketing, 2006). Also, Golding admits that â€Å"There is a need for a whole new approach to attraction development because there are so little offerings for the tourists, particularly at nights† (Reposition tourism marketing, 2006). On the other hand, multinational companies like Vodafone mobile operator can face a threat of service adaptation and can become a victim of global competitors (Calling for a rethink, 2006). In some cases, the companies need repositioning strategy to relocate the brand in consumers’ minds creating a competitive advantage.   This repositioning strategy ensures the customers credibly (Lovelock and Wirtz, 2003). Repositioning helps companies to establish trustworthiness, confidence, and competence for customers. It is possible to say that reposi ­tioning becomes the best strategy to keep the company’s identity and per ­sonality in the customers’ minds. The company can force customers to buy their products creating new image of the brand. In the era of globalization, repositioning strategy can help to differentiate the brand image from competitors proposing distinct features of the service offering. So, reposi ­tioning is not just about persuading and creating new image in the consumers’ minds, it is about earning consumers’ trust (Calling for a rethink, 2006). Another set of conditions under which it is appropriate to reposition an existing service offerings deals with future needs and wants of the customers and their changing expectations. Customers needs and wants have changed over time. These causes require companies to find new strategies and directions to deliver customer satisfaction. For instance, the main problems faced by WHO is that â€Å"Like many middle-aged organizations, a lot of the WHO’s problems stem from the fact that it has not changed with the times† (Repositioning the WHO, 1998). In this case, repositioning is needed to provide satisfaction of members’ social needs, and a sense of personal identity. Also, WHO organizations â€Å"regard government action as automatically good, profit as automatically evil, and intellectual property as theft† (Repositioning the WHO, 1998). Advances in technology and innovations require new positioning strategies to attract potential customers around the world. In this situation, repositioning becomes a response to the need of customers and increased market competition. It is possible to conclude that managing repositioning effectively is a complex and challenging task. Although firms need to meet expectations of their customers and resist competitors in order to remain profitable. For many organizations, repositioning is measured as profits in one form or another, while for others they may be the achievement of social needs. Today, repositioning strategy is one of the most important elements of marketing which helps companies to respond effectively to changing demands and new economic environment. References Calling for a rethink. 2006. The Economist. http://www.economist.com/business/displaystory.cfm?story_id=5444969 (accessed 19 August 2006) Essential repositioning of the Airline. Luxair. n.d.   http://www.luxair.lu/luxair/jsp/polopoly.jsp?d=642&a=6662&l=en (accessed 19 August 2006). Europe’s Winners and Losers. The Continent’s slump will change the landscape. 2001. Business Week. October 15.   http://www.businessweek.com/magazine/content/01_42/b3753136.htm (accessed 19 August 2006) Lindsay, J. 2005. Super Service: How to Revive The Business Publication You Just Bought for ~$35 Million. June 26.   http://www.mediabistro.com/articles/cache/a4669.asp (accessed 19 August 2006) Lovelock, Ch., Wirtz, J. 2003. Services Marketing, People, Technology, Strategy. Prentice Hall; 5 ed. Reposition tourism marketing, says Golding. 2006. August 15. http://www.jamaicaobserver.com/news/html/20060812T210000-0500_111077_OBS_REPOSITION_TOURISM_MARKETING__SAYS_GOLDING_.asp (accessed 19 August 2006) Repositioning the WHO. 1998. The Economist. http://www.economist.com/research/backgrounders/displaystory.cfm?story_id=127783 (accessed 19 August 2006)