Question

Topic: Research/Metrics

Research For Brand Extenstion

Posted by Anonymous on 250 Points
I am preparing a proposal for brand extension. The brand extension could canabalize the other brand of the same as company. Pleasse advise me what I should consider as designing this prposal. Thanks in advance for your advices.
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RESPONSES

  • Posted on Author
    Thanks Phil. Below is more details for your reference "XXX is one of the leading body care brands in the world with prominent presence in body lotions and petroleum jellies. Looking after skin through moisturisation is at the heart of the brand and is its core property in all the markets. In South East Asia markets, the body lotion is the core of the brand but in some markets like South Africa, XXX is known primarily for petroleum jelly.
    In the recent past the brand has been extended into skin cleansing (both bar and body wash). The proposition for XXX cleansing is 2 in 1 benefit which is germ protection plus moisturisation. The thought is to borrow the moisturisation equity from the core of the brand and add germ protection to make it a compelling proposition that is also differentiated from strong anti-bac brands like Dettol, Safeguard, Protex and Lifebuoy. XXX cleansing has been launched in some markets like Philippines and Thailand and even though these are early days, there are all indications that the extension is doing quite well in terms of sales performance. In Indonesia, Vietnam & Singapore, XXX exists only as body care brand as of now.
    In the meanwhile with the men segment exploding, XXX has also launched ‘XXX For Men’ range of facial cleansers and facial moisturisers. Nivea for men is usually leader in this category in South East Asian markets and XXX For Men has already started taking over Nivea in facial cleansers.
    While XXX is getting good growth for the business with these extensions, the purists have started worrying if the core of XXX brand is getting diluted. One look at the communication of XXX lotions, XXX for men and XXX cleansing suggests that there are no common cues running in the ads of these three formats (except the brand name ofcourse) and the propositions are completely different from each other.
    The issue really is if the brand should extend into neighbouring territories (such as cleansing and male targeting) and grow volumes dramatically, even if this means diluting its core. Or should it hold on to the sharp differentiation that it gets by focussing on the core which could sustain its growth for many years to come in body care alone?
    In this context, this research is being setup to understand:
    1. What is the essence of cleansing category? What emotional and functional benefits consumers derive from cleansing?
    2. What are the core values of XXX brand? What does the brand really mean to consumers and where does brand derive those values from?
    3. What is the fit of XXX with the cleansing category? Is the 2 in 1 proposition a good fit for XXX in the cleansing category?
  • Posted on Accepted
    It sounds like you're asking the right questions and looking at the right issues.

    My attitude toward cannibalization is that it's great! ... as long as (a) the total pie gets bigger, and (b) the gross margin of the cannibalizing product/brand is greater than that of the brand being cannibalized.

    It's smart to always be looking for ways to grow the brand and increasing profitability. Cannibalize away!

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