Being Stuck in the Middle

A brand is “stuck in the middle” when it holds no defined positioning in the marketplace.
These brands usually struggle to remain profitable and eventually die.

Gap was launched in 1969 and quickly became synonym with cool, affordable American-
style apparel.

In recent years Gap is struggling to define its identity, both internally (stuck between Old
Navy and Banana Republic), and externally, facing competition from more focused brands
such as H & M and Zara.

Brand Cannibalization
Changes in the marketplace require bold strategic moves that affect a company’s brand
portfolio. Such moves include launching new brands to fight newly emerged competition, or
meant to capture a new market segment.

These strategic moves have to be carefully planned in order to avoid cannibalization of the
existing brand(s).

Consider a common scenario: an established premium brand decides to launch a lower cost
alternative to capture a new market segment consisting of consumers who currently cannot
afford it. Many companies choose the shortest way to market: strip the existing product of
some of its premium features, and market it under a very similar brand name, that would
create an obvious connection with the premium brand.

Great strategy, at least on paper. In reality, these companies run the risk of alienating their
core customers who currently pay a premium for the premium brand.

In order to avoid cannibalization, enough separation has to exist between the two brands in
order to keep them both relevant to appealing to different consumer groups.