MGCR 352 Lecture Notes - Lecture 8: Coca-Cola Cherry, Brand Equity, Caffeine

• School: McGill University
• Department: Management Core
• Course: MGCR 352
• Professor: Da Hee Han

Document Summary

If a irm has a successful product it oten ofers product line extensions or new products that closely resemble the irm"s exising products. Ex: coke - diet coke - cafeine free diet coke - cherry coke. Ofer more variety and thus increase brand loyalty. Opportunity to ofer a broader range of price points. Must address a real consumer need to generate enough addiional sales to cover the cost of development. People do not eat more, drink more, brush their teeth more frequently because they have more products to choose from risk of cannibalizaion if not enough difereniaion. Cannibalizaion: manufacturers must avoid damaging cannibalizaion or the thet of sales from exising products by the new ple. Test markets can determine the degree of cannibalizaion that may occur. Retailers are also concerned about cannibalizaion because they do not want to stock products that steal sales from one another without increasing overall sales and proits.