Products, Positioning, and Market Segmentation
Advertising professionals realize that the heart of any campaign is the product and the position it holds in people's minds. Products and their brand names are newsmakers themselves. Wendy's hamburgers, Apple computers, and California raisins (particularly when they sing and dance) are objects of our attention and interest.
Understanding the complexities of a brand identity and its position is no easy task. A good case in point is the activities of Coca-Cola in the last few years. After a $4 million research project, Coca-Cola brought out a new Coke formula in May 1985 with the intention of retiring the old formula. To everyone's surprise, the intense feelings of American consumers toward old Coke were such that the old formula had to be kept on the market, renamed Coke Classic. The first response to the formula change was to criticize it as a ruinous error; the bottom-line result, however, has been the capturing of even more of the market. In addition, the brouhaha itself probably earned millions of dollars in public relations and media coverage. All of the network news shows reported the story and the soap opera "General Hospital" was interrupted to inform viewers that Coke Classic would soon be available. An Ad Age commissioned survey in July 1985 indicated 68 percent of those interviewed knew about the introduction of Coke Classic. This massive response to a brand is itself a good lesson in the importance of even the most mundane of products for the American public. It is interesting to compare the early article, "Missing Ingredients in 'New' Coke's Research," with the more positive view taken just one week later in "Coke's Switch a Classic."
The next article in this section, "Ten Years May Be Generic Lifetime," details the rise and fall of generic products in the last ten years. When they first appeared, generics were seen as threats to brand products, particularly for products for which lower price might be a primary criterion for purchase. Although generics enjoyed growth during the recession of the early 1980s, with increase in American incomes, they have now dropped back to their selling level at introduction. In their growth stage, however, the threat they posed to brands stimulated major manufacturers to bring out lower-cost brands that were more competitive with the generics. It is interesting in studying the no-name generic phenomenon to compare these products with a product like Coke, which, because of years of advertising, has such a strong personality.
One of the most controversial areas of product concepts is the brand extension. A new product gets to share the name of an older, established brand. Early theorizing suggested that brand extensions would sap market clout from the established product, but these fears proved groundless. Today brand extensions occur not only within the company, but companies are licensing their brandnames to all kinds of products in the hope of...