Branding
For many years Conson had been the country’s leading brand of household cleaner. Some of its competitors were now selling better cleaning products but customer loyalty remained strong. So when the company’s R&D team came up with a new type of household cleaner that represented a major technical advance over the existing product, the management team wasn’t sure what to do. Should they replace their existing successful product and use the Conson name on their new household cleaner? Should they use the Conson name on both products? Should they launch a new brand to compete against their own market leader? Or should they forget about their new product altogether?
HELEN: My point is you should not replace it immediately because current customers do have very high loyalty to the existing brand and both R&D and the market testing show that the set up cost for the launching products is very high. It’s more efficient if they can have a longer product cycle so what they want to do is, maybe to introduce a new product in a different segment. ANDREW: So even though they know they’ve got a good market base with the product that’s out there already, you don’t think it would be wise to bring a new product in. HELEN: It’s wise that they bring in new products but they can do it differently by positioning it to a different group of consumers. Even for household cleaner, there are different market segmentations. ANDREW: Yeah, OK. Anybody any other ideas? ANURAG: Yeah, I think if the competitors have a better product than the clients at the moment, it will not be surprising if the client will begin to lose market share if the better product is not introduced. I suggest that the company should replace their existing product with a superior one and keep the same Conson brand name.
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