brand proliferation

brand proliferation

the availability in a market of an extensive number of similar brands reflecting the MARKET SEGMENTATION policies of suppliers and the need to offer a comprehensive range of brands to compete against rivals. By offering a number of brands, suppliers may be able to expand their sales. However, they have to be mindful of the extra production and marketing costs this involves and the particular danger of cannibalizing' their own sales (i.e. an increase in the sales of one particular brand may be largely at the expense of their other brands rather than taking away sales from rivals' brands). From a wider public interest perspective, brand proliferation is sometimes considered objectionable by the COMPETITION POLICY authorities, because, while ostensibly serving to increase consumer choice, the ‘saturation’ of a market by established firms' brands may result in ‘excessive’ advertising and act as a BARRIER TO ENTRY to new firms. See PRODUCT DIFFERENTIATION, PRODUCT RANGE, PRODUCT VARIETY.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

brand proliferation

an increase in the number of brands of a particular product, each additional brand being very similar to those already available. Brand proliferation occurs mainly in oligopolistic markets (see OLIGOPOLY) where competitive rivalry is centred on PRODUCT-DIFFERENTIATION strategies, and is especially deployed as a means of MARKET SEGMENTATION. In the THEORY OF MARKETS, excessive brand proliferation is generally considered to be against consumers’ interests because it tends to result in higher prices by increasing total ADVERTISING and sales promotional expenses.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005