Wednesday, February 5, 2014

CVS Drops Tobacco: A Lesson in Positioning

The classic definition of positioning is to create, via marketing, a competitively distinctive position for your brand or product in the mind of the target market. This concept is relatively new to marketing, having been introduced by Al Ries and Jack Trout in their 1980 book, Positioning: The Battle for Your Mind.

CVS's unexpected announcement that the drug retailer will stop selling cigarettes and other tobacco products by October is a classic example of positioning at work in the marketplace.

Take a look at CVS's competitive situation. It's battling two other major US chains, Walgreens and Rite-Aid. During the past year, Walgreens has used the slogan "At the corner of Happy and Healthy" in its advertising, website and social media. Rite-Aid's marketing focuses on its Wellness+ rewards program. In other words, both drug chains want consumers to associate them with health and wellness.

Now, with one announcement, CVS has positioned itself as the drug chain that is so concerned about consumer health that it is giving up the sale of tobacco products. CVS won't be sacrificing a huge amount of revenue (about $2 billion out of $123 billion or so), and tobacco is certainly not a growth product category.

Without jeopardizing a lot of money, CVS is generating a ton of free media coverage and goodwill for its principled stand. It already has 1.3 million Facebook likes, and I know the company's decision has been shared and tweeted many, many times since it was announced. (Some consumers are angry, but most appear to be applauding CVS.) One of its Twitter accounts has been posting messages thanking such groups as the American Diabetes Association for their public support.

Now when you think of CVS, what comes to mind? If your first thought is that the retailer has dumped tobacco, CVS has succeeded in positioning itself in a way that is meaningful, distinctive, and memorable. Giving up tobacco is a good thing for health and a good thing for positioning, too. Walgreens and Rite-Aid might even have to follow suit. Stay tuned.

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