Pi Attitude Zone: Flexibility

When Brands Turn Cannibal

Advertiser clients are increasingly concerned that their brands might be turning cannibal.

Marketing giants in fields like food & beverage, toiletries, healthcare and household products share a problem that they would perhaps prefer not to talk about – or perhaps even think about.  Typically each of these big companies fields a multiplicity of brands, each one dedicated to maximizing market share, building corporate profit, and blowing rival brands out of the water. 

But what if the brands in your portfolio are really competing with... um... each other?

So-called ‘brand cannibalization’ has become big advertisers’ big headache, particularly given the rising cost of a launch campaign.  The TNS research consultancy has published UK-based research which examine  the launches of 3,500 consumer products, spread across the savory snacks, laundry, soft drink and skin care categories.  Then they tracked the aftermath of those launches. 


60% of cases resulted in “deadweight” products which brought the company no real long-term growth, or, worse, turned out to be ‘cannibals’ that did little more than take away custom from other products from the same manufacturer.  "Too many businesses are spending huge amounts of money on ‘quasi-innovation’ that only convinces existing customers to swap within their range", said the TNS report.

A case in point was new snackfood product Pringles Xtra, a line extension which did actually generate significant sales.  However, volume sales of Xtra turned out to be at the expense of other products in  the existing Pringles range, resulting in minimal franchise growth.  Was it worth the effort and expense?

A deeper analysis of the cases studied suggested that less than one-sixth of new product launches could be considered ‘expansion innovations’.  Part of the problem is that companies launching new products mostly read volume sales alone to figure out if a new product is justifying the investment necessary to launch it.  Too few marketers assess the potential negative effects the launch can inflict across their portfolio as a whole.  Many companies are aware that their brand offerings cannibalize each other as a matter of course, regardless of their product launch cycle.  They need to differentiate them, and target them to discrete consumer groups in order to maximize sales overall. 

Pi says:  brand cannibalization is fiendishly difficult to prevent if volume sales are the only measure.  Pi’s solution to the problem relies on careful comparisons of brand-user attitude profiles between brands and sub-brands.  If the Pi profiles are too close to each other, you’ve got a cannibal on your hands. 

Luckily, Pi-ChartingTM shows you what to do about it.

Zone: Flexibility Country: Europe Product – Business / Professional