Existing brand buyers account for 63% of sales of new product line extensions.
Research carried out by Catalina Marketing in the US brings into sharp focus where the buyers of new product line extensions come from, and the answer is; ‘they’re mostly the people who have been buying your other products’. 27% of sales of a brand’s new product line extension, and 42% of purchases of those new product extensions are by existing brand buyers. It turns our a substantial percentage of new product sales are cannibalized from the brand’s other product line.
This significant degree of cannibalization has to be taken into account when developing a product line extension strategy, with extra focus on creating truly complimentary product extensions where 1+1 actually equals 2.
Catalina Marketing: www.catalinamarketing.com
Cannibal Holocaust pic from Grindhouse Releasing