Cannibalization

(depending on the country, there will be extra cost for logistics) o Products manufactured for several countries not just one. Design is usually common from country to country. o No advertising except during the sales periods Issues: - Risk of cannibalization  Zara’s extensive location strategy involves putting multiple Zara stores which have the same products in the same city.  Also the other Inditex stores can cannibalize Zara’s sales since the majority of the chains have a similar target.

forecast may need to be adjusted for certain externalities, such as cannibalization and/or lost rent. Thus, if the introduction of the smartbox reduces sales of other Macrohard products by 3 million dollars per year, while the per unit production cost may be reduced by 10 dollars because of joint production with other Macrohard products, the table must reflect this. Free Cash Flow – an example Forecast earnings including cannibalization and lost rent Sales COGS Gross Margin Selling, General, Aministration

improvement in quality and design. The German could not have taken the risk of damaging their brand image. Rover's range of cars was not so different from BMW and so did not endanger the image of the German. But it was different enough to avoid cannibalization between the two companies. By acquiring Rover, BMW afforded economies of scale thanks to shared production, logistics or parts purchasing. Synergies between these two car makers were of high potential. Rover's distribution networks for instance

prendre en considération. Il est tout à fait possible sur un segment de marché similaire que les marques d’un même groupe se concurrencent et fassent du tort à l’entreprise. 4. How successful do you think Zara has been by meeting “risk of cannibalization” as a consequence of the multi-brand strategy? Zara a réussi à gérer ce risque de “cannibalisation” car les différentes marques du groupe sont judicieusement positionné sur différent segments de marché, ce qui engendre une différence au niveau

instance, if we prioritize the residential market, two channels top the sales: indirect points of sales and distance selling (customer service, internet, voice server, etc.). Objectives per channel should be defined and aggregated to avoid any cannibalization effect. Unlike regarding a proprietary sales network, “money” remains a major factor for boosting indirect sales efficiency: line rate, threshold achievement fee, possible air time commission, bonuses, all mechanisms should be carefully assessed

market share, and competitive analysis. ■ Chapter 3—Margins and Profits: Revenues, cost structures, and profitability. ■ Chapter 4—Product and Portfolio Management: The metrics behind product strategy, including measures of trial, growth, cannibalization, and brand equity. ■ Chapter 5—Customer Profitability: The value of individual customers and relationships. ■ Chapter 6—Sales Force and Channel Management: Sales force organization, performance, and compensation. Distribution coverage and logistics

Factors Based upon the individual products, other factors may exist that would help to formulate an estimate. For example, if another brand offered a similar promotion, the success of that campaign may be utilized to determine the estimate. “Cannibalization” of existing brands may also occur causing increased returns when Coty Inc., or one of its competitors, launches new brands. D. Recognition of Unusual Returns There are certain circumstances when it is not appropriate or possible to recognize

presides over a host of high-profile beauty names such as Lancome and Garnier. The company's top 14 global brands account for more than 90% of its $14.3 billion in consumer sales. Despite the number of headline brands, there is very little cannibalization — a feat that L'Oreal pulls off because of its extraordinary commitment to positioning and marketing. Merrill Lynch analyst Sandhya Raju estimates that L'Oreal spends about 30% of its sales revenues on advertising and promotion, against an average

the core brand. This is why , the strategy of Armani to extend more and more it brand can be critical by the possible damage , the possible weakness to strength it brand. According to Leslie de Chernatony and Malcolm Mc Donald , “The risk of cannibalization” , that is to say the fact of a reduction in the sales of one product because of the introduction of a new product by the same producer, can be damage the core brand by the increasing sales of sub-brands, buyers will shift to the cheaper version

ceteris paribus to increase his sales in Russia. About the Alliance with Nissan The alliance between Nissan and Renault permit both to share their know-how and competitors advantages on the Russian market. Thus, this alliance allows a non-cannibalization between their products. New Operations Renault has several subsidiaries in Russia in order to produce and sell more efficiently but also to become really known all over the world. Until now there are dozens different countries all over the