Journal of Marketing Management
, 391-406ISSN1472-1376/2001/03-40391+15 £4.00/0 ©Westburn Publishers Ltd.
Consumer Response to Line Extensions:Trial and Cannibalisation Effects
Kingston BusinessSchoolLondon BusinessSchoolCannibalisation and trial are both potential consequences of line extension strategies with, normally, the former to becontrolled and the latter encouraged. Both stem from the familiarity of the parent brand, the main driver of lineextension strategy. For a brand manager, considering thelaunch of a new line, these two effects create tensions; how cantrial be maximised whilst parental share loss is minimised?We examine these two effects in different line extensions in theUK and Germany to understand how trial and cannibalisationinteract to affect the success of a line extension. Our empiricalresearch analyses the purchase patterns of buyers of a newline, before and after the launch of the extension, and comparesthese with the level of cannibalisation. Our aim is tounderstand the dynamics of consumer response to the newline. The household panel data analysis of fmcg purchasesshows that line extension buyers are disproportionate purchasers of the parent brand, both before and after thelaunch. However these measures of cross-purchase correlateonly weakly with the level of cannibalisation (rho = .42 before,.43 after). Whilst a line extension clearly encourages purchaseof the new line by purchasers of the existing parent, this leadsto additional portfolio purchasing as often as substitution.This provides some proof of the efficacy of line extensionstrategies in expanding brand sales.
Branding, cannibalisation, line extension, risk.
The popularity of line extension strategies over the last two decades has beenfuelled by the desire of companies to reduce costs and minimise risk(Lawrence 1993; Aaker 1991; Buday 1989; Tauber 1981). The benefits of usingexisting brand names are widely claimed, but this quest for marketingefficiency needs to be tempered in the light of potential disadvantages.
Kingston Business School, Kingston Hill, Kingston-upon-Thames, Surrey, KT2 7LB,England.
London Business School, Sussex Place, Regents Park, London, NW1 4SN, England