Brand Extension and the Cannibal Effect

Brand strategy consultancy

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’. The findings showed 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.

Dave Ansett
Creator of Brands
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Catalina Marketing: www.catalinamarketing.com
Cannibal Holocaust pic from Grindhouse Releasing

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