Boost Mobile Shifts Brand Positioning to Price-Value - Is That Smart?

Boost Mobile, a unit of Sprint best known for its teen positioning (”Where you at?” campaign) is changing its positioning to a value message, according to Todd Wasserman in BrandWeek. Facing strong pricing competition from the likes of Cricket and Tracfone, Boost is reducing its rates from 20 cents to 10 cents a minute. The new pricing is centered around an all-you-can-talk-for-one-dollar plan, which applies to in-network calls. The campaign uses a “Dollar a Day Chat Plan,” with George Washington as the metaphor figure. It’s a definitive shift from lifestyle positioning to price positioning.
Which begs the question: Given the current economic climate, is this the time to put all your brand eggs in the price-value basket?
It’s tempting to do so, especially when your boss is looking for the next quarter’s results, but beware!
We could do a whole series on price wars, and maybe my colleagues at the Chasm Institute would like to comment on pricing strategies in the mature market. But let’s just take the positioning itself. The problem with positioning on price only, is that it leaves you nowhere to go when your competition comes back and undercuts you with special promotions or even long-term pricing drops. This approach gets you into the dreaded Price Promotion Doom Loop. If Boost is trading off long-term brand value for short-term gains, they will find it difficult to recover to any type of premium positioning. This leaves room for competitors like Virgin Mobile (”You Rule!”) to maintain its Cool factor with youth, while offering alternative plans to compete with Boost. I believe Boost will weaken its brand and paint itself into a corner that it may regret. Its teen customers will only buy on price for so long. In the end, the personal image connection will win out. That means cool designs, and rebel positioning. We’ll see. But in these times, it is far better to keep your core positioning and emotional connection strong, and play with pricing, rather than the other way around.

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