Know-How Exchange : Strategy

Melanie,

Microsoft, Oracle and SAP have all done this with their business applications. SAP and Oracle are probably the clearer cut examples since these two organization never had much of a lower end business until about five years ago. (I'd have to double check the release dates)

Oracle launched NetSuite to provide SaaS delivered business applications. SAP launched Business One, and more recently, Business ByDesign.

Oracle and SAP both needed to reposition their company, or at least distance themselves from the perception of the company as only serving the higher end. Oracle did this by distancing themselves from the NetSuite organization. SAP did this by changing, or at least trying to change, the perception of the company.

I am happy to provide more perspective if you want it.

All the best!

Melissa

I don't think the average consumer knows that Microsoft, Oracle, etc are all separate entities. I think Inbox's examples are very relevant. Its like you have already decided the answer and only want validation.

Toyota, Lexus and Scion do not cannibalize each other. The Scion owner isn't going to be interested in a Lexus. And its not just about cost. And, as a new owner of a Scion, I am asked every day "who makes that"? Its as cool and hip as I am.

Home builders often brand a level of home by different name-- and don't cannibalize. Even if the brand is the same-- a Starbucks on every corner- and each has a line out the door. The identify the need and plan their stores accordingly. My rep agency has products that are licensed under 9 different names. Same exact product and price, just different labeling to stores that have different clientelle. The stores have something "exclusive" and has opened/increased sales accordingly.

It means to me, more sales and more avenues of revenue.

You don't give your industry-- if you did you might get more relevant examples.

Sell Well and Prosper tm

I just had someone email me this article and thought of your question. I have extensive industry experience in this market-- none canibalize each other. All different buyers and price points.

Mohawk consolidates brands

By Kimberly Gavin

Acknowledging that a downturn in contract is likely to come, The Mohawk Group has realigned and consolidated its commercial brands, according to president Al Kabus. The fruits of that nine-month effort were visible in the company's new Merchandise Mart showroom during NeoCon 2008.


"When I joined the company last year, there were six brands," Kabus said, including Durkan Hospitality, Durkan Commercial, Karastan Contract, Bigelow Commercial, Mohawk Commercial and Lees.


Durkan Hospitality is the market leader in that segment, but the other five all served the core contract market. Kabus said research affirmed the market breaks down into three levels: entry, middle and high end. "Does it make sense to have more brands than the market? Look at General Motors. It's muddy," Kabus said. The first consolidation was Karastan and Durkan Commercial under the Karastan brand. That was no-brainer decision, Kabus said, likening the brand to Neiman Marcus in a department store analogy. The new tagline: A Step Above. The brand is more heavily weighted toward broadloom, around 65 percent to 75 percent, but also has tile.


Tile figures prominently in Lees line, which won out at the center price point. Lees' legacy of performance with technology like Duracolor and Unibond backing pointed it naturally for the center slot, which Kabus likened to Nordstrom. The line is 70 percent modular and carries the tag: The Art of Performance.


The Bigelow line Kabus describes as the Target of the company with a completely revamped product line far more focused on style. Sensible Style is the tag. Bigelow contains both woven and tufted products and could include as much as 35 percent tile in the mix, Kabus said. Its focus is on availability and economy.

If you understand this article--the question is WHY would they cannibalize each other?