Promoting new products in the market is an art – and a risky one in that. Branding strategies have to be well thought out and new product positioning has to be carefully done to reflect market demand and scope available for product differentiation, while taking care that branding of existing products are not compromised on. In some cases, for instance, in the retail sectors, there is a phenomenon called “Cannibalising”, where new brands or outlets tend to eat up on the sales of existing stores. The same could also happen in other businesses, if product positioning and branding strategies are slightly off the mark.

Branding nd Product Positioning: New product launches are always carefully crafted and designed to enthrall the consumer and catch people’s imaginations. With all the spadework having gone behind the product conception and design, branding strategies project the product image in the consumers’ minds. And sometimes, it could so happen that the projected images of new products clashes with the existing ideas in the consumers’ minds. While many marketing campaigns are indeed done with the idea of challenging existing beliefs of the consumer, sometimes, the company’s product positioning strategies might, inadvertently, affect existing branding propositions and product positions.

Mahindra and Renault came together for a Joint venture to produce sedans that sought to redefine the consumer’s perception of existing cars that were in the Indian market. In a market that was dominated by small cars, Mahindra Renault wanted to position a product as being the “big car”, calling the brand, the “Wide Bodied Logan”. Mahindra Logan, from Renault, was a sensation in its launch and the company was getting set for large volumes of production, banking on the product for numbers and profitability.

However, Mahindra indulged in “Cannibalising” of existing product. Mahindra, indigenously, launched its Multi-utility vehicle, Mahindra Xylo, in the lines of its success model Scorpio, which had earlier been sort of style statement in the Indian market. The problem, however, was that the new Xylo was positioned as a Sedan and the product promotion was about scaling up from Sedans to the larger Xylo. The obvious target market for Xylo was the sector that was looking to upgrade from sedans. But the product promotion strategy spoke so much against sedans that the message went against Logan. Now, Mahindra and Renault are scaling down their projections for Logan and are adjusting their production schedules and manufacturing facilities to suit a demand of 500 units a month.

Product positioning and branding can often be counterproductive, as in the case of Mahindra’s strategy, if the company has a range of products and brands across different market positions – and new products should be carefully conceived so as not to clash with or cannibalise existing products.