Usually marketers tend to get nervous, if a competitor tries to attack their brands directly with new products. This is even more the case, when the new competitive offer has already been successfully launched in other countries. Some years ago Nestle's confectionary brand YES was faced with such a situation. A competitor announced the launch of Milka Tender, another small cake in candy bar size, which was already successful in Italy. The advertising budget of the new product in Germany was significantly higher than the communication support intended for YES.

The key questions in such a strategic situation are:

1. How big is the potential of the new competitor Milka Tender?
2. How big is the cannibalization rate of YES?
3. Which additional initiatives should be taken to defend YES successfully – if necessary?

Market simulation in combination with media-placement research was used to answer these relevant questions. The market simulation forecasted a target group size for Milka Tender of 23 percent under ideal marketing conditions (100 percent brand awareness, 100 percent distribution). This prediction proved to be very accurate. The predicted market share deviated only by 0.1 percent from real market figures

Validation of our market share prediction for Milka Tender

Innovative media-placement research increased the efficiency of YES's communication budget significantly. Therefore an increase of the YES advertising budget was not considered to be necessary. This proved to be true.

Methods used:  Market simulation in combination with media-placement research