This paper takes departure in brand cannibalism in multi-brand firms. Many multi-brand firms seek growth by adopting a multi-brand strategy where two or more similar products are marketed under different brand names. This strategy has many advantages. When adopting a multi-brand strategy, it is usually with the expectation of acquiring a greater market share by addressing each brand to the different needs and trends of separate segments in the market. However, the firm is also putting itself at risk by having their brands eat into each others’ sales, causing cannibalism. In order for the firm to tackle this challenge, a deep insight into the phenomenon cannibalism is of decisive importance. It is therefore a problem for the multibrand firm that specific knowledge concerning cannibalism is lacking. For examining this subject, an analysis of the individual consumer has taken place, since it is the consumer’s choice of product, which determines whether or not cannibalism occurs. Traditional consumer behaviour theories have been applied combined with new perspectives on affective consumer behaviour. The purpose has been to develop a deeper understanding of the phenomenon cannibalism, from which recommendations on how the multi-brand firm can minimize brand cannibalization can be made. The thesis statement is: Based on a deeper understanding of the phenomenon cannibalism, we wish to examine and clarify ways in which the multi-brand firm can tackle the challenges connected to this. Two qualitative focus groups have been completed, grounded on the theoretical framework. Based on the analysis, we have acquired an extensive understanding of the core subject cannibalism. We have identified several situations in which cannibalism is more than likely to occur and we have found evidence of ways to minimize the phenomenon in the brand portfolio. In addition to this, we have achieved a deeper understanding of the consumer, who cause cannibalism and of the consumer, who will not cause cannibalism. From this understanding, we have developed a number of suggestions that we believe, will be useful for multi-brand firms in the development of an effective portfolio strategy. Our primary recommendations are, of course, that the multibrand firm should target different brands at well-defined, clearly distinct market segments, which among other things means positioning the firms’ brands against each other as well as against the competition. However, the results from our study showed that differentiating the brands does not always imply less cannibalism. Many consumers, who cause cannibalism, do indeed feel that the brands they switch between are differentiated, but still they choose to switch, either due to necessity or due to different needs and wants in different situations. Therefore, we also argue that brand loyalty is, at least, as important as separating the brands from each other. Consequently we recommend a consumer driven approach, where the firm pays great attention in the building of a longlasting relationship between the brand and the consumer in question. But also other suggestions concerning brand loyalty, differentiation, and the marketing strategy in general are made. Finally, we suggest conducting further research in the topic by quantitative means, in order to verify and enrich the results.
|Educations||MA in International Business Communication (Intercultural Marketing), (Graduate Programme) Final Thesis|
|Number of pages||416|