Add a new line to a Mumbai dairy portfolio

The decision

A dairy company is considering a licensed sports brand and an endorsement from its own parent brand for a high-protein drink. A fictional pilot sells 2,000 bottles, of which 700 replace sibling purchases. The new bottle contributes ₹32 before a ₹5 royalty and the sibling contributes ₹24.

How much portfolio contribution does the licensed concept add?

Worked solution

Reveal the visual and solution

1. Classify the offer as product development for existing buyers, then assess expansion into new markets separately. Test parent endorsement and partner branding independently to see which association drives choice.
2. Subtract royalty from the new unit contribution, then deduct lost sibling margin. Incremental portfolio contribution is ₹37,200 before launch support costs.
3. Compare with an unlicensed or co-branded alternative. Require clear quality controls and rights, and pilot only if the added association pays for the royalty and launch cost.

Review the marketing concepts

• Brand Architecture
• Brand Architecture & Portfolio Management
• Brand Extensions & Ansoff Grid
• Brand Licensing
• Co-branding Strategies