Segmentation Strategies for New National Brands

Abstract

The authors examine the issue of determining the market segments to which a new national brand should be targeted. The usual recommendation is that the new brand should be targeted toward those segments that exhibit considerable brand switching. However, a new national brand should also attempt to attract segments that are loyal to existing national brands as well as segments that primarily purchase private labels. These implications follow from an explicit consideration of the changes in pricing and distribution patterns which occur when a new national brand is introduced. The results are illustrated with a set of diary panel data for facial tissue.