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Brand Management

August 13th, 2013

The cannibalization in the business world is a phenomenon that is generally not desirable, although it is controlled by the company can have its advantages The cannibalization is usually defined as a situation in which sales of a product causing a reduction in sales of other products of the same company. The concept could be extended not only to the products of a company but an entire category, as we shall see. To account for cannibalization and the potentially damaging effects if not taken into account, we consider the example of Volkswagen Group. Among other exclusive brands, among the general framework by Volkswagen, Seat and Skoda This requires careful positioning of these three brands, would normally be a premium brand such as Volkswagen, Seat position as a sports brand, and Skoda would cheap “brand? So far, so good. However, by dint of insisting that they have quality Skoda Volkswagen, the first began to cannibalize the second. If the Fabia had a similar quality Pole, or the Octavia was similar to the Passat, but at a lower price offered more equipment, why buy the most expensive brand? This same problem has been experienced General Motors, which owns brands such as Cadillac, Pontiac, Chevrolet, GMC, Opel, etc., and in many cases not only compete, but for cost savings, share too many things, which resemble each other.

As a result, sales for example, produce a decline in sales. The same situation may occur in an entire product category, as in the case of Netbooks. Sales of these minicomputers laptops with screens 10 inches around, are cannibalizing sales of low-end laptops. The cannibalization is therefore an issue that companies must take extreme care, this is also one of the reasons why certain brands advertise that they do not manufacture for others. If I know I can buy a yogurt Danone manufactured under the brand name Acme, but 30% cheaper, possibly buy the latter. But if it makes for other brands, if you want to buy a quality Danone yogurt, I have to buy that brand, I have no choice. There are however companies that promote the cannibalization among its brands, to promote their competitiveness and to dominate the market through multi-brand one of the specialists in this strategy is the corporate giant, which dominates the market through its various brands in different product lines.


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