Everyone loves Piggy Brand Bacon products, sold in supermarkets worldwide. Piggy acquires a mail-order steak company and renames it Piggy’s Steaks. This could be an example of:
  1. Marginal analysis
  2. Trying to use the Halo Effect
  3. NPV analysis
  4. Same store sales
  5. Ponzi Scheme
Explanation
Answer: b - The best answer is that Piggy is trying extend the ”halo” of its Bacon brand to the new acquisition. The Halo Effect is when the high quality of one brand or product results in people perceiving related or similarly branded products to be excellent as well, whether they are or not.

The Halo Effect is also a personnel management adage which refers to people’s often errant belief that someone who is extremely good at one thing will be great at another. For instance, an amazing computer programmer might get the role of project manager because people think he is brilliant. This is a potential mistake that can lead to product failures.

Key Takeaway: Will Piggy’s strategy work? We don’t know. The Halo Effect only extends so far. For instance, Neutrogena branding a new line of luxury automobiles isn’t likely to work.

Take a nuanced look at each case by suggesting market research. In this case, perhaps the logo of a happy pig might not play well with consumers looking for steak.
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