Line Extension

01.

Background

A customer is considering to expand his product range with an additional flavor in two different package sizes

02.

Research questions

  • What influence does the new flavor have on the performance of the brand?
  • What influence do different package sizes have?
  • Does the new flavor cannibalize other products of the same brand?
03.

Approach

Real Life Storetest incl. Scanner Data Analysis

  • 34 weeks of testing in one control and two test groups each at REWE und real
  • Test group 1: small package size of the new flavor
  • Test group 2: small and large package size of the new flavor

Loyalty Card Analysis

  • Basic KPI analysis (penetration, repurchase rate, number of shoppers and purchases, turnover per purchase, …) for > 170.000 shoppers
04.

Results

Real Life Storetest incl. Scanner Data Analysis

  • The introduction of the new flavor will double the brands sales and revenues at real. At REWE, the increase in sales and turnover is approximately 75%.
  • The introduction of both package sizes leads to a significantly higher uplift than just the small package size
  • While slight cannibalization effects are apparent at REWE, there was no measurable cannibalization at real

Loyalty Card Analysis

  • The penetration rate of the new flavor is much higher than the current range of products and there is very little customer overlap with the current assortment
  • At 66%, the share of new customers is very high for a line extension
  • The new flavor is mainly bought by shopper segments that are open to new things and predominantly buy branded products

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