Is Cannibalization of Own Brands a Real Threat? A Case Analysis of Benson & Hedges and Dunhill in Pakistan

Abstract

Dunhill was launched in the premium brand category in December 2005 by Pakistan Tobacco Company (PTC). Dunhill is British-American Tobacco Company’s (BAT) well renowned international brand. Dunhill has been well received by consumers primarily due to its unique fresh taste and exceptionally smooth smoke. Benson & Hedges is the largest selling cigarette brand in the premium brand category. This brand has capitalized on its strong equity based on consistently superior quality. The presence of two tobacco brands in the same premium category can cause cannibalization. Cannibalization refers to the decrease in sales of an existing brand due to the introduction of a new brand offered by the same company. The purpose of this study is to analyze whether Dunhill cannibalizes Benson or Hedges or not. The report contains hypothesis regarding cannibalization, a survey along with its results followed a schematic diagram for the theoretical framework for a successful premium tobacco.