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Kookabura Bats Case Introduction It is a humid November morning in New Delhi, India, and you're finishing your first week of work as the Indian cricket bat category manager for the Kookabura, a leading provider of cricket bats to professional and amateur cricket players. You've just joined Kookabura after spending several years as the country product manager for Adidas's cricket equipment line in Sri Lanka. Cricket is a bat-and-ball game that was first played in England in the sixteenth century. It now enjoys popularity around the world, and some claim that cricket is the second-most popular sports game in world (next to soccer). For many years Kookabura has been successfully selling two bat products, and combined sales are nearing a million units a year. One of Kookabura's products is a top-of-the-line model called the Kookabura Kahuna. The Kahuna is made with wood from English willow trees, which are indigenous to England, and which Kookabura has successfully transplanted to India. The Kookabura Kahuna bat is a high-performance product, and it is a "Grade 1" bat, which means it is the best looking (no blemishes in the wood). Over the years, Kookabura has been able to gain endorsements from a number of prominent cricket players, who often appear in Kookabura's advertising. Kookabura's second bat is a lower quality model called the Kookabura Blade. The Blade is made with wood from Kashmir willow trees, which are indigenous to India and Pakistan, and which cracks or splits more easily than English willow, especially if the bat is not oiled periodically. Kookabura Blade bats are "Grade 3," which means they are cosmetically less attractive than the Kahuna. They are therefore priced significantly lower than the Kahuna. The Kahuna accounts for $65\%$ of the company's unit sales and $74\%$ of its revenue, with the remainder coming from the Blade. The table below reports the company's annual financials* when you joined the firm. Sales and costs have been steady for the past couple of years. 1 already widely associated with high performance. So, they would call the new bat the Big Kahuna. The company also anticipated that the Big Kahuna would be endorsed by many of the same cricket players that currently endorse the Kahuna. Strategy Option 2: A second strategy would emphasize that the bat is ready to play (without knocking in). The aim would be to steal organizational buyers from competitors. Organizational buyers tend to purchase large quantities in a single order, and they include cricket clubs, professional cricket teams, and municipalities that support youth cricket. These buyers are price sensitive, which is why a significant percent of Kookabura's Blade sales are to organizational buyers. This strategy proposes that the new bat would be called the Kookabura Readyplay. Although it would be significantly more expensive than the Blade, the Kookabura sales team would emphasize how much time and money organizations can save by not having to knock in and oil a set of new bats, and that purchasing these bats would therefore result in net savings to organizations that purchase them. Under either launch scenario, the introduction of the new bat would have an impact on sales of Kookabura's existing products. Based on consumer research and laboratory testing, Kookabura expects a cannibalization rate of 17 percent if they pursue the Big Kahuna strategy and 7 percent if they pursue the Kookabura Readyplay strategy. Managers also expect that virtually all cannibalized sales for the Big Kahuna will be drawn from the Kahuna. Marketing communication for the Big Kahuna would emphasize quality and performance, which are attributes shared by the Kahuna. Both bats would also be endorsed in similar ways by athletes already associated with the Kahuna. On the other hand, managers expect that virtually all cannibalized sales for the Readyplay will be drawn from the Blade. Organizational buyers do not tend to have the budget to afford purchasing the Kahuna, but many see value in the lower-quality Blade. Because strategic cases could be made for either approach, the senior management team has asked you to look at the financial ramifications of the branding strategy choice. The initial financial inputs are detailed in the following table: The quantitative marketing skill of cannibalization essay paper

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