An Introduction to Brand Dilution, Extensions, and Cannibalization

You might know Cadbury for their high-end chocolate and candy, but did you know they sold instant mashed potatoes from the early 1960s to the mid 1980s? Image Credit: Geek Goes Vintage Smash, their instant mashed potato brand, surprisingly reached mainstream success. But, unfortunately, it was at the expense of lowering their flagship product’s perceived quality. Cadbury is a premium confectionery company, so when they started producing low-end food products, like instant mashed potatoes, it’s not shocking to learn that their association with the finest chocolates weakened. Eventually, in 1986, Cadbury sold Smash, only 20 years after they introduced their instant mashed potatoes to the world. Cadbury’s expansion into instant mashed potatoes created a new revenue stream and even generated more sales for them, but it damaged their brand as a whole. This phenomena is called brand dilution, and, below, we’ll dive into it, as well as other related concepts called brand extensions and brand cannibalization. Brand Dilution Brand dilution is when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product[…]

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